M-Pesa (M is for mobile, “pesa” is Swahili for “money”) was launched by Safaricom, Vodafone’s Kenyan associate, on March 6, 2007. The service is designed to safely send receive and store money via a simple mobile phone. The service also allows customers to make bill payments and top-up airtime.
In order to use M-Pesa, customers have to register for the service at an authorised agent and deposit cash in exchange for electronic money which they can send to their family or friends. All transactions are secured by entering a PIN number and both parties receive an SMS confirming the transferred amount. The recipient receives the electronic money in real-time and then redeems it for cash by visiting another agent.
Watch the video: how does M-Pesa work
M-Pesa also works for businesses, which can use the service to pay for business transactions. Business can also receive payments from customers via the paybill facility and can pay employees directly into their M-Pesa accounts.
M-Pesa is now active in 10 countries: Albania, the Democratic Republic of Congo, Egypt, Ghana, India, Kenya, Lesotho, Mozambique, Romania and Tanzania, and has served almost 29.5 million active customers as of December 2016.