Kenya is the world's capital of mobile transactions. While the rest of the world uses credit cards, debit cards and all kinds of plastic money, we use our mobile phones to send money, make a purchase as well as pay for bills.Safaricom Kenya were the pioneers of mobile money with their M-Pesa services. Since then, other mobile providers have followed suit and they all provide money sending and receiving services.M-Pesa was derived from two words. M stands for Mobile, while Pesa is the swahili term for money. Directly translated then, M-pesa becomes Mobile-Money.Image credit: Safaricom.
Way Back When
Back when I was in high school about 10 years ago, mobile transaction was unheard of. As a matter of fact, few people own mobile phones. My mum used to send me pocket money and bus fees through money orders. She would go travel all the way to the nearest town (we lived in the village), buy a money order in the bank, put it in an envelop and mail it via post office to my school. Once I received the money order a week or so later, I would take it to the school bursar, and she would again travel to the nearest town (my school was also somewhere deep into the village), cash in the money order and bring the money to do. The process was long, time consuming and simply tiresome. Not to mention expensive..
And then came M-pesa, a service by safaricom that lets their subscribers receive, save, send or withdraw their money from a registered agent. It works by employing middlemen known as agents. Agents apply to be independent agents of the company. They have small shops known as M-Pesa outlets where they register new customers, deposit money into customer's phones, or help them withdraw the money.Mobile money is referred to as float and this what is exchanged between customers, and between a customer and an M-Pesa Agent in exchange for money.If your head is spinning as hard as mine trying to understand what I am talking about, I'll use real situations to explain how it all works.
Registering and Depositing Money
To register as a customer, one has to visit an agent with the national ID or a Passport. The agent your mobile line by taking your details. You get to choose your pin though you also get an automatically generated secret word sent to you through the mobile phone. This is the word you use when contacting the customer care in case you have a problem. Registration is normally free. The agent is supposed to have hard cash as well as money in the mobile form. This is what we call the float. To deposit money in your account, you give the agent money, and they send equivalent float cash to your phone. This is also free.Once the money is in your phone, you can leave it there for as long as you like, use it to buy airtime for your phone, send it to a friend, transfer it to your bank account if your bank allows, pay your water or electricity bill, use it in stores to pay for items or send it to someone else.
Withdrawing Money from M-Pesa
Once you receive money, withdrawing works the same way as depositing. Almost. You visit the agent with your ID or passport, you then send the float to them in exchange for money. This is normally done at a small fee. The agent will record your ID number and you get to sign to confirm that you received the money. All these transactions are available on the menu in your phone. You enter your secret pin every time you are transacting.
Paying For Bills
In the past Kenyans used to waste so much time queuing to make payments for their utility bills every end month. This is now a thing of the past. Anyone can now pay their bills easily through Mpesa from the comfort of their homes. No more rushing at the eleventh hour to beat deadlines. Such transactions take at most 48 hours for the account to reflect the payment, but is it still better than getting penalized for failing to make the said payment in time.