What is M-PESA?
M-PESA is Africa's most successful mobile money service and the region’s largest fintech platform. M-PESA is the preferred way to make payments across the continent both for the banked and unbanked due to its safety and unmatched convenience. It also provides financial services to millions of people who have mobile phones, but do not have bank accounts, or only have limited access to banking services. Now, M-PESA provides more than 51 million customers across seven countries in Africa with a safe, secure and affordable way to send and receive money, top-up airtime, make bill payments, receive salaries, get short-term loans and much more.
Established on 6th March 2007 by Vodafone's Kenyan associate, Safaricom, M-PESA is Africa's leading mobile money service with more than 604,000 active agents operating across the Democratic Republic of Congo (DRC), Egypt, Ghana, Kenya, Lesotho, Mozambique and Tanzania.
Our 51 million customers are making over $314 billion in transactions per year through M-PESA
In early 2020, Vodacom & Safaricom completed the acquisition of the M-PESA brand from Vodafone Group through a newly created joint venture. The joint venture will accelerate the growth of M-PESA through Africa by giving both Vodacom and Safaricom full control of the M-PESA brand, product development and support services as well as the opportunity to expand M-PESA into new African markets.
How it works
Customers register for the service at authorised agents - often small mobile phone stores or other retailers such as barbers, butchers, bakers, etc. - and then deposit cash in exchange for electronic money. Customers can then send money to their family or friends throughout the country.
Once they have registered, all transactions are completed securely by entering a PIN number and both parties receive an SMS confirming the amount that has been transferred. The recipient receives the electronic money in real-time and then redeems it for cash by visiting another agent. Alternatively, they can spend it at an M-PESA merchant.
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Send and receive money
Domestic transfers: M-PESA customers can send money in real time to any other M-PESA customer with an account registered in the same country. In most markets customers can now send money to mobile money users on other networks as well.
International transfers: Through our international remittance partners, M-PESA customers can receive and send money across borders in real time.
Convert cash to e-money at any of our agent points
Convert e-money to physical cash at any of our agent points, or at ATM machines
Buy goods and services in store or online with any registered M-PESA merchant
Bills & Tax payments
Pay utility bills, school fees, taxes and much more with M-PESA
Airtime & Data purchases
Buy airtime to make calls and browse the internet
M-PESA customers build a credit score that enables them to access loans via our bank partners. Products include M-Shwari and KCB M-PESA in Kenya and M-Pawa in Tanzania. We work hard to ensure customers not only have access to credit but are also educated so they understand the implications of a loan.
M-PESA customers have access to fantastic individual and group savings products including Xitique in Mozambique, M-Koba in Tanzania, Mokhatlo in Lesotho and M-Shwari in Kenya. Halal M-PESA also enables our customers to save safely whilst complying to Sharia laws. Savings accounts contribute to strengthening our customers’ credit scores, giving them better access to financial services.
Customers can access an overdraft facility on M-Pesa to support them to make payments when they don’t quite have enough balance on their account. The better their credit score, the larger their overdraft can be.
Agents also have access to an overdraft to ensure they can offer the best service to our customers, even when they’re low on float.
M-PESA customers can set their risk appetite and invest into wealth management funds to increase returns on their holdings. As always, we work hard to educate customers so that they understand the risks and rewards associated with such investments.
M-PESA customers can contribute to insurance schemes to safeguard against unforeseen events or financial shocks. Through our partners, we offer insurance products that cover health, agriculture, devices, transport, funerals and businesses.
Customers and Agents can transfer money between their M-PESA wallets and bank accounts in real time.
In Store: M-PESA businesses can receive payments for goods and services through their M-PESA business accounts, either via unique 6-digit till numbers, a QR code, point of sale devices or digital invoices.
Online: By integrating with our APIs, local and global e-commerce businesses can make M-PESA a payment option on their websites. Customers enter their phone number on the merchant checkout page before receiving a prompt to their phone to enter their M-PESA PIN, confirming the transaction. Where logistics are involved, M-PESA offers an escrow service, whereby the funds are held until the buyer confirms receipt of the goods. Find out more here.
M-PESA organisations can send money to individuals or in bulk in real time. Typically used for paying salaries, NGO/government disbursements and petty cash payments. M-PESA validates the recipients name and phone number to ensure payments go where they’re intended. M-PESA also makes it easy for organisations to manage and pay utility bills and taxes.
Whether it’s on a smartphone or a desktop, M-PESA organisations have everything they need to manage their finances and inventory with M-PESA. Through our portal, organisations can track sales & expenditure, make payments, send invoices, order stock, access credit, manage subscriptions, set recurring payments, drive customer loyalty and much more.
Businesses can roll up money from multiple tills into a centralised account. They can also send money from their M-PESA account to their bank accounts (and vice versa) in real time.
The M-PESA Open API hub allows developers to safely test and launch M-PESA services on 3rd party platforms. Find out more about our extensive range of APIs and how to integrate to M-PESA here.
Businesses can grow traffic and engagement through prime advertising space on the M-PESA customer and business apps.
The M-PESA customer and business super apps create a whole ecosystem of 3rd party services. Whether it’s eCommerce, travel, events or business services, our mini app functionality exposes both an array of new services to M-PESA customers, and a huge customer base to our mini app partners.
M-PESA provides templates that enable mini apps to be created with minimal developer knowledge, whilst larger organisations can develop their own mini apps if they would prefer.
Case studies & customer stories
International remittances contribute to achieving 12 of the UN’s 17 Sustainable Development Goals. In particular it is proven a 10% increase in per capita remittances leads to a 3.5% reduction in poverty (United Nations, 2020).
Through strong relationships with leading money transfer operators such as Western Union, MoneyGram, World Remit, Remitly and MFS Africa, M-PESA is the destination for over US$1.5 billion remittances every year, including 60% of formal remittances into Kenya and 20% into Tanzania.
Credit: M-Shwari Kenya
Launched in 2012, M-Shwari is the revolutionary service provided in partnership with Commercial Bank of Africa (CBA) in Kenya, which enables M-PESA customers to instantly access loans and contribute to savings directly from their phone. For many customers using M-Shwari this was the first time they accessed formal credit or benefitted from interest earning deposits. The success of M-Shwari relies on:
- customer data: using telcom and M-PESA usage to help determine the customer’s credit risk and affordability to approve loans;
- security: customers value being able to make financial decisions confidentially, provided through transacting securely over their mobile phone; and
- flexibility: enabling customers to use savings to leverage credit and earn interest from depositing from as little as 1 Kenyan shilling.
Since launching M-Shwari in Kenya, M-PESA has launched similar services with other partner banks in Kenya and Tanzania. Over the past year, M-PESA customers have accessed over €1 billion of credit across our lending services. M-PESA Africa continues to innovate in this area, looking to support consumer choice and working hard to educate customers on the implications of access to credit.
Savings: M-Koba Tanzania
M-Koba is a service enabling customers to safely store and manage funds within a group. M-Koba was launched in Tanzania in partnership with Post Bank. Across Africa, it is very common for customers to form groups as a mechanism for helping to save and access funds. The ways these groups work vary, but they often provide extra motivation and rigour to put funds away, and by collecting across multiple people they can provide support in accumulating lump sums.
While this approach has been very successful, groups still face many challenges - which digitisation with the use of M-Koba can address. For example, M-Koba provides:
- better security: funds can only be accessed by multiple approvals with their unique M-PESA PIN;
- more transparency: customers are notified real-time when any group transaction occurs; better flexibility, in case customers cannot make a meeting in person; and
- greater efficiency: automatically keeping a trail of records and data, which is then easier to use in making decisions, for example to lend to a member.
Business collections: M-KOPA Solar, Kenya
In Kenya and Tanzania, M-KOPA Solar has connected hundreds of thousands of off-grid homes to affordable solar powered electricity for lighting, cooking and charging their mobile phones. Since the initial outlay for the solar kit is unaffordable for most households, through M-PESA customers make small daily payments to M-KOPA, paying off the cost of the kit over the course of a year. The solar system is then fully owned by the household who can continue to use it without making any further payments.
"M-KOPA has brought the benefits of solar lighting to thousands of rural homes, enabling our children to study, relieving our mothers from the burden of fetching firewood and burning kerosene late into the night”- President Kenyatta, July 2015
NGO disbursements: World Food Programme, Kenya
The World Food Programme (WFP) was keen to stimulate the local economy around the Dadaab and Kakuma refugee camps and reduce dependence on expensive logistics to distribute food aid flown in from abroad. To ensure the food aid vouchers they were providing to over half a million people in 125,000 households were being spent as intended on food and water, the WFP used the M-Pesa closed loop system which limited to the spending of aid to specified merchant points.
Our partnership with WFP has actively improved the livelihoods and financial independence of over half a million refugees and the local merchants living in the Dadaab and Kakuma camps.
Business disbursements: G4S Salary Payments, DRC
In the Democratic Republic of Congo (DRC), G4S struggled to pay its security staff who were spread around the country. Local supervisors would head to remote areas to pay staff with cash face-to-face, which was a huge security risk to them and their employees. M-PESA allowed G4S to pay its staff in bulk, directly to their mobile phones in an instant.
Merchant payments: Vivo Shell, Kenya
In Kenya, M-PESA tills were set up across Vivo Shell fuel stations, enabling customers to buy fuel via mobile money. At the end of the day, the fuel station supervisor could transfer the money the M-PESA till to a designated bank account via their mobile phone or a web portal. This greatly reduced cash held at the fuel station and time taken to deposit cash at the bank, increasing the security and efficiency of the fuel stations.
Pay by M-PESA is a service that allows global and domestic merchants to offer Africa’s leading payment method as a payment option at online checkouts. Through M-PESA, merchants can access over 40 million customers, the majority of whom do not have access to other online payment methods such credit or debit cards. Pay by M-PESA offers a broad suite of merchant APIs such as C2B payments, refunds, recurring payments, dynamic currency conversion and settlement.
Over two hundred thousand African merchants, including DSTV, Uber, Kenya Airways, and Jumia already accept Pay by M-PESA. Now, the focus is on bringing the service to global players to fulfil the high market demand.
Businesses & organisations:
If you’re a business or organisation looking to use M-PESA services, get in touch!
If you are a global merchant or PSP and want to learn more about integrating with M-PESA, please visit our dedicated site here or contact us here.
If you’re an M-PESA customer, you can find out more about the services we offer in your market below.