Subscribers to M-Pesa in two of the world’s leading mobile money markets — Kenya and Tanzania — can now send and receive funds with one another.

The money transfer corridor between the two East African countries is a first for the well-known service, said Vodafone.

M-Pesa is a dominant force in Kenya but only operates domestically, until now. Its business has been built on subscribers sending remittances home to their villages. Now payments can be sent internationally too, at least to and from neighbouring Tanzania.

M-Pesa is run by Safaricom in Kenya and Vodacom in Tanzania, which happen to be the largest operators in their respective markets. Both share Vodafone as a shareholder.

Vodafone talked up the potential savings for transferring money via its new corridor compared to traditional channels where users are charged up to 31 per cent of the transaction value.

By comparison, using M-Pesa to send $50 across the Tanzania-Kenya border would cost just one per cent of the transaction, plus an undisclosed foreign exchange fee, claimed Vodafone.

Vodacom recently agreed to work with its domestic rivals in Tanzania in a step forward for mobile money interoperability in the country.