For several years now we have been pointing at M-PESA as a beacon of a successful money transfer solution. For almost as long, we have been pointing at M-PESA and saying ‘that is all well and good, but it could only work in parts of Africa. Oh, and other regions with low banking penetration.’ Now, though, it is in Europe.
The focus recently has been on mobile wallets in ‘developed’ regions. Payments solutions and even the ‘payments experience’ is now under the microscope, and rightly so.
But we must not forget M-PESA and other solutions that were originally designed to work in a certain set of circumstances. They, too, evolve and become more sophisticated. They actually drive growth in economies that, before such solutions, had no way of moving money quickly and cheaply. In Kenya, for instance, the penetration of both credit cards and bank accounts has grown rapidly as a result. And the flexibility of the platform is encouraging its use in a number of ways. Ways that might make it work in, for instance, Europe.
The latest application is ‘M-Ledger’ which allows customers to track, monitor, manipulate and export M-PESA transactions to spreadsheets. Now, the sophistication of M-PESA is such that even banked customers would find it useful. Other applications include the ability to pay bills, pay people – including the payroll – and settle accounts.
The first stop is Romania where the profile of unbanked customers, rural economies and insecure systems is similar to Kenya and other African countries. It launched in India last year.
But we believe, in a world where you can tweet money, wave a phone to pay and live in a nearly cashless society almost every solution has the chance to carve out a niche. Apple Pay or a competitor might well become dominant, but we should never underestimate solutions that started with the simplest applications in mind.