Western Union brings Kenyan mobile cash-transfer service to UK

Rating: Hugely popular micro-transaction service migrates to UK

Kenyan mobile cash-transfer service M-PESA (it stands for “mobile cash”) is being brought to the UK thanks to a deal between Safaricom, Vodafone and Western Union. Safaricom is the company who created the service, back in March 2007.

What does it do?

M-PESA is a massively popular service which was, until recently, only available in Kenya. It targets people without a bank account, or who cannot get one. M-PESA maintains a bank account into which subscribers can deposit or withdraw cash, using secure PIN codes, from authorised M-PESA retailers. It allows rural villagers, who have a huge rate of mobile phone ownership but practically no bank accounts, to store up almost 500 euro’s worth of Kenyan Shillings in a mobile bank.

What does this deal mean?

Up until now, M-PESA has only existed inside of Kenya. Recently, Vodafone has made the service available in Tanzania and Afghanistan. Now, thanks to Western Union, Kenyans working in England will be able to transfer money home by SMS in a matter of seconds.

From the press release:

“The successful take-up of M-PESA in Kenya has clearly demonstrated the demand for easily accessible, secure cash payment services in emerging markets,” said Nick Hughes, Vodafone’s Head of International Mobile Payments. “Our partnership with Western Union allows M-PESA subscribers to receive international remittances and builds on the demand we have already seen domestically in Kenya.”

“This program aligns a global leader in money-transfer services, the world’s largest mobile operator group, and arguably one of the most impressive success stories in mobile money,” said Matt Dill, Senior
Vice President, Western Union Digital Ventures. “In offering M-PESA users the opportunity to receive funds from abroad for the first time, these three companies are changing the way money moves around the
globe.”

Michael Joseph, CEO of Safaricom, said, “This is another great step for M-PESA and will benefit many Kenyans all over the world. International remittances form a significant part of the total income for some
Kenyans, and the partnership with Western Union will provide Kenyans with an opportunity to receive small values of cash from abroad in a fast, safe and affordable way.”

What we think?

Off-deck content and service providers should be cautiously optimistic about this news. Nobody has really managed to make mobile billing and payments work smoothly so far. The lack of a stable, recognisable payment service for mobile internet has made consumers nervous. A comment I’ve heard more than once is that the mobile web needs it’s own PayPal or Western Union to step in and create a payment service that users will be confident using… and here we have Western Union getting heavily involved in the world of mobile money transfer. Not cause for raucous celebration just yet, but certainly a step in the right direction. Watch this space.