Kenya’s M-pesa mobile payment system

Kenya’s M-pesa mobile payment system

Kenya's mobile service provider Safaricom is testing electronic money-transfer services via mobile phone to India, Tanzania and the U.K. Safaricom's partners Vodafone UK, Vodafone Tanzania and Vodafone Essar in India are testing their systems after the trial phase proved successful in Kenya, where the service is used by more than 1.7 million customers. Vodafone owns the license for the software, and it will be the first time that African countries will be able to send and receive money from within Africa, Europe and Asia through mobile phones.

This move comes soon after the service’s bid to enter the UK market runs into legal hurdles. Planned introduction of money transfers via mobile to UK have hit a regulatory barrier with authorities demanding that the operator meet certain criteria involving banking, exchange rate and AML rules. The setback to immediate launch in the UK, which sends 20% of total remittances to Kenya, is expected to effect the revenue growth plan at the same time that mounting competition and the plateau in subscriber growth numbers is likely to slow growth in income from voice calls.