Safaricom’s M-Pesa goes global in deal with Western Union
By lanreakinola | Published: 04 April, 2011
Safaricom, Kenya’s biggest mobile operator, has announced a deal with Western Union, the international money transfer company, to enable its M-Pesa mobile money service subscribers to receive direct cash transfers from Western Union agents worldwide.
“Consumers can now send money directly to the mobile ‘wallets’ of Safaricom M-PESA subscribers in Kenya from 45 countries and territories,” explains Karen Jordaan, East and Southern Africa Director at Western Union.
The service taps into Africa’s huge remittances flows, which the World Bank estimates to have totalled $40bn in 2010.
Betty Mwangi Thuo, general manger financial services at Safaricom, says that “This partnership also opens up the north American remittances corridor which accounts for over 50% of remittances to Kenya.”
The service, which extends to more than 80,000 Western Union agent locations worldwide, is the latest in a series of products to be launched in Africa’s fast growing mobile money industry.
“Mobile network operators are seeking value-added services for their customers to improve loyalty, with account-based and mobile financial services topping the list of “sticky products” similar to online bill payment,” says Western Union’s MS Jordaan.
Launched in 2007, M-Pesa enables money transfers between mobile telephones, and has an estimated 13.5m subscribers in Kenya alone. It is also available in Tanzania and South Africa. Last summer, Safaricom teamed up with Kenya’s Equity Bank to launch “M-Kesho”, a comprehensive financial services product. M-Kesho gives Safaricom subscribers direct access to their Equity Bank accounts, effectively turning the user’s cell phone into a mobile bank branch.
Other major operators in the region are rolling out similar products.
Last November South Africa’s MTN Group, the continent’s largest mobile operator, announced a similar agreement with Western union, and in March 2011 the company teamed up with South African insurance provider, Hollard Insurance, to launch a pilot insurance scheme using mobile telephones in Ghana.
MTN has also launched its MobileMoney service in a number of countries, with plans to extend this to all 16 of its African markets, which account for a subscriber base of more than 100m users. At the same time, Indian owned Airtel, which has a presence in 15 countries in the region with 45m subscribers, has announced plans to expand its Zap mobile money service.
Africa’s mobile money industry, the worlds fastest growing, has generated significant interest for its potential applications to drive financial inclusion on the continent. An estimated 80 percent of sub-Saharan Africa’s population does not currently have access to formal financial services.
Comment by shaban ali
M-pesa great move from safari com but when are they going to realize that the whole africa(north to south,east to west) is a virgin market waiting to be tapped western union has for long been making money from the africans in diaspora plan Locally and Execute global
Comment by Frederic Tape
Good news for customers of these two services .it is great to see that the right ecosystem is slowly being put in place ..The financial reward for both entities is certainly good.
It will be good to have reps from MTN and Western Union present at the upcoming conference on Tic and Banking taking place in Abidjan in March 2012.
Comment by evelyn
I have often been frustrated by companies which list as international, global or african but when you inquire further they restrict and say we dont sell to Africa, we only deal with South Africa or we only deal with North Africa. It is a frustrating problem which I think should be put on the homepage or change the name of the company.