The banking industry has been urged to stop fighting Safaricom’s M-pesa mobile money transfer service and instead ride on its platform to offer m-banking services to its clients. Addressing the Kenya Internet Governance Forum at Nairobi’s Jacaranda Hotel recently, Communications Commission of Kenya (CCK) chairman Eng. Philip Okundi noted that M-pesa has facilitated financial transactions between the poorest of the poor in a country where banks have failed to cater for the unbanked population.

“Banks cannot do what M-pesa has done in this country. Formal banks have been very punitive in their approach, especially in emerging economies. We are striving to alleviate poverty in this country and that is exactly what M-pesa has done. As CCK, we shall continue to support M-pesa, having licensed it to provide the m-money services”, Eng Okundi emphasised.

Echoing similar sentiments, Eng James Rege, chair, Parliamentary Committee on Energy, Information and Communications challenged banks to look for their own niche market instead of fighting M-pesa.  “Banks do not have the capacity to offer the kind of platform on which M-pesa is operating. It is therefore futile to continue fighting M-pesa which is being hailed as a success worldwide”, said Eng Rege. However, the Karachuonyo MP asked CCK to demand an explanation from Safaricom over the recent transaction hiccups experienced by its customers.

Launched in March 2007, Mpesa—which now has 7.4 million customers—has revolutionised money transfer services in the country by providing Safaricom subscribers with a fast, safe and affordable way to transfer money by phone.

An innovative solution that enables customers to transfer money by phone, M-Pesa, initially targeting the unbanked population, has become the most popular and convenient money transfer service due to its low transfer charges and availability among the rural population. Kenya is the first country in the world to use M-Pesa, thanks to a joint venture between listed telecoms operator Safaricom and the British cellular giant Vodafone.

Since its launch in 2007, M-Pesa continues to grow in popularity and functionality. Besides person to person transfers, customers can now pay bills and receive small value payments like benefits and salaries from businesses. It is noteworthy that through these new functionalities, M-pesa has partnered with over 40 organisations, some of which are bank and non-bank financial institutions. Currently, 300 bank branches offer M-Pesa services.

The service has won various awards both locally and internationally. They include the Kenya Banking Awards 2007/2008, the Marketing Society of Kenya Best Product Innovation 2008, the Stockholm Challenge 2008, GSMA 2008, Africom 2008 and the World Business and Development Award 2008.