First introduced in 2007, M-Pesa enables people to pay for goods and perform other financial transactions using a mobile device. The M-Pesa system was launched in Africa by Safaricom and Vodacom, the two biggest mobile network operators in Tanzania and Kenya. M-Pesa soon spread to South Africa (M-Pesa South Africa was launched in 2010) and from South Africa to other parts of the continent. In some markets, for example the Kenyan M-Pesa market, M-Pesa users can use M-Pesa not just to pay bills, purchase air time or transfer money to other M-Pesa users. They can also use M-Pesa Kenya to transfer money between their M-Pesa account and a bank account. The range of M-Pesa banking services in Kenya is ever expanding, and includes loans, insurance, and accounts that offer interest. Perhaps this will soon be the case with M-Pesa South Africa too. There is no doubt that the M-Pesa market will continue to develop and expand not just in Kenya but also in Tanzania, South Africa and beyond.
In Tanzania, the M-Pesa story was much more chequered than the story of M-Pesa in Kenya. In Tanzania, M-Pesa was launched in 2008 (M-Pesa Kenya was launched in 2007). Mobile phone users in Tanzania initially didn’t take to M-Pesa with as much enthusiasm as people did in Kenya (the story of M-Pesa South Africa was, as we shall see, similar). The M-Pesa market in Tanzania gradually picked up, though, and within a few years M-Pesa users in Tanzania were in the millions (though still lagging behind M-Pesa Kenya). The M-Pesa market in South Africa has been particularly slow. M-Pesa analysts have attributed this to the fact that financial regulations in South Africa are stricter than in Tanzania and Kenya. M-Pesa analysts have also suggested that mobile device users in Kenya and Tanzania are better educated about using M-Pesa than people are in South Africa.
What is the forecast for M-Pesa on the continent? It looks as though the greatest success of M-Pesa will not be in South Africa: M-Pesa use in South Africa is low. Rather, M-Pesa looks likely to be especially successful in Kenya (this has been the case since M-Pesa was launched in the country), and perhaps in Tanzania too if the M-Pesa market continues to expand. After M-Pesa in Tanzania and M-Pesa in South Africa, M-Pesa is now expanding into Ghana. How will M-Pesa fare in Ghana? Better than South African M-Pesa? As well as M-Pesa in Kenya? As uncertainly as M-Pesa in Tanzania? 2016 is the year that the next chapter of the M-Pesa story begins.