Safaricom’s M-Pesa mobile money service now processes more transactions within Kenya than Western Union manages globally, according to a recent report by the International Monetary Fund (IMF). It’s another statistic that points to the extraordinary success of M-Pesa (the same report from the IMF also points out that M-Pesa provides mobile banking facilities to more than 70 percent of Kenya’s adult population).  

There is no doubt that M-Pesa’s success is a great thing but sometimes it feels as if it is the only mobile money service in the world, not just the most popular. At least that’s how it must appear to the rest of the world who are not intimately involved in mobile money. Certainly M-Pesa has become the reference model for non-expert opinion which is fine as far as it goes. Problems arise when the mobile industry thinks the same way.

As we now know the M-Pesa model cannot be easily reproduced in every country. The evidence is that the same approach cannot be replicated as if using a jelly mould across every emerging market or even in every country in the same part of Africa. There is a danger in methodically trying to follow the M-Pesa template. Countries have radically different banking markets and histories of how they use money. Different histories mean different requirements.  We now realise that local factors are critical to the take-up of mobile money services and make the setting of general principles a hazardous pursuit.

And even M-Pesa has its setbacks. The mobile money system suffered an outage in recent days which crashed the service and caused headaches for users. According to a story in the Nairobi Star, the problem was a breakdown in the network connection between Safaricom’s servers in Kenya and its data centre which is based in Germany. The operator’s CEO Bob Collymore wants to overhaul the system and have it entirely based in Kenya, said the newspaper. The same report also mentioned the possibility that former CEO Michael Joseph, who has been away acting as a Fellow with the World Bank, may return to lead Vodafone’s M-Pesa services across Africa.  

And this is not the first time M-Pesa has had problems. There have been a number of other outages this year. This is not to say its system has more problems than its peers. The point is just that M-Pesa is not invincible. It is also not the only success story in the mobile market although not as far as the wider world is concerned. How will this perception change? If Google Wallet or some of the mobile operator-backed NFC services are really successful then they might come to enjoy the same iconic status as M-Pesa. Such services, with their use of NFC rather than SMS and targeting of users who overwhelmingly already have bank accounts and credit cards, could not be more different from the Kenyan service. Maybe that’s what it takes to change people’s minds.

Richard Handford

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members.