The grandaddy of mobile payment services comes to the UK

No discussion about the global growth of mobile payment services is complete without mention of Safaricoms M-PESA. Available in Kenya since March 2007, it allows subscribers to send money to one another via their mobile devices. The service was hugely popular in Kenya, as it doesn’t require a bricks-and-mortar bank to use… or even a bank account! The service has now made its way to the UK, so that Kenyans in England can quickly and easily send money home.

How does it work?

M-PESA works by letting customers withdraw or deposit cash from certified agents - which can be just about any merchant. Most commonly you’ll find the local agent is a Safaricom retail shop, but petrol stations, supermarkets and local shops can apply to become M-PESA agents as well. Once a customer has lodged money in their M-PESA account, they can SMS that money to anyone they want, even non-Safaricom customers. They can also use it to pay bills or top up their phones.

What’s the UK deal?

This service has been under pilot for some time now, with Western Union, Provident Capital Transfers and KenTV as partners in the UK. Its official launch will see Kenyans in the UK accessing the service in mostly the same way as their friends and family at home. Customers who wish to send money to Kenya must provide the retailer with both their name and the name and number of the recipient. That largest amount that can be sent in one go is £250 - and each transaction will incur a fee of between £4 and £9.60

What we think?

It’s a good step, but there are issues with this. The Western Union involvement in this process was announced way back in December of last year. You have to wonder why it has taken so long to get going? Other money services have been trialled and launched in that time. This service also comes in a lot heftier than customers might have imagined. Yes, it’s very convenient to be able to send money via SMS, but losing a minimum of £4 every time it happens is pretty harsh, especially for those living in poverty stricken areas.