A Third of Kenya's GDP Now Passes Through M-Pesa

If you were to nominate one mobile money service, today, as the most-successful on the planet, it would hard to propose any company but M-Pesa. By some accounts, about a third of Kenya’ gross domestic product passes through M-PESA and Safaricom earns more money from M-PESA than it does from text messaging, in part because SMS tends to be bundled, free of charge, in the payments system.

In August 2011, the Wall Street Journal reported Vodafone earned $21 million through its Kenyan subsidiary, with $15.6 million coming from M-Pesa in license fees. As of November 2011 M-Pesa had over 14 million subscribers (out of a population of about 40.5 million, according to the World Bank) and more than 28,000 agents across the country versus around 600 ATMs

M-Pesa is operator-centric, working through a SIM toolkit application that sits on all Safaricom SIM cards.

To put money on your phone, you walk into an authorized agent, hand over your money, then receive an SMS saying that the money has arrived on your phone. To send money to someone, you go to the pay menu on the phone, look for the person in your phonebook, or add their details, then send them the amount. They get a message saying, in effect, “If you have an M-PESA account, you now have 50 shillings [say] on your phone. If you are not an M-PESA account holder, go to any agent and they will give you the money.”