More than a billion people in developing countries have a mobile phone but not a bank account. Safaricom and Vodafone built M-Pesa, a mobile money transfer application. For a distribution channel it franchised small stores as agents, bringing convenience to money transfer and receipts. Used by more than 19 million Kenyans in 2014 and channelling more than 40 percent of Kenyan GDP, the service is the most successful scheme of its type on earth.
M-Pesa has considerable additional cross-sector growth opportunities and provides a platform for new product and service innovation such as M-KOPA. In addition, it has spawned a host of start-ups in Nairobi, whose business models build on M-Pesa’s foundations33. From a development perspective, one study found that rural Kenyan households that adopted M-Pesa have experienced income increases of 5 to 30 percent.
Customer reach A cellular network service with an effective mechanism for scaling quickly.
Customer penetration A core value proposition ensuring clients use the services as well as the phone.
Volume margin Extremely small per-user revenue vs significant overall transfer volume.
- Job opportunities The creation of an agent network that can accept and disburse money.
- Financial inclusion Taking financial services to the unbanked and providing new means to transfer money across long distances.
- Economic resilience Brings trust and stability to the economy, as shown during 2008 election violence when there was a risk of not being able to access the traditional banking system.