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Gateway Blogosphere Round-up: M-Pesa’s Success and Limitations

Catching up with the latest blogs and resources on the telecom-led mobile money model
Masai Mobile Banking. Jay Bendixen, 2012 CGAP Photo Contest.

In May 2016, Vodacom announced that effective 30 June 2016, it would be discontinuing its M-Pesa service in South Africa. In the company’s press release, Vodacom CEO Shameel Joosub stated:

“Vodacom’s decision is based on the fact that the business sustainability of M-Pesa is predicated on achieving a critical mass of users. Based on our revised projections and high levels of financial inclusion in South Africa there is little prospect of the M-Pesa product achieving this in its current format in the mid-term.”

While Vodacom describes M-Pesa as “the world’s most successful money transfer service,” there are clearly limits to its ability to replicate its success everywhere. With its expansion into other countries, and most recent exit from South Africa, researchers and industry bloggers have been examining the factors leading to the success and failure of the innovative M-Pesa model in different countries. The Gateway has compiled some interesting and informative resources about the M-Pesa model and the lessons that can be learned from its experience.

What is M-Pesa?

Launched in Kenya in 2007, M-Pesa is a money transfer service which enables millions of people who have access to a mobile phone, but do not have or have only limited access to a bank account, to send and receive money, top-up airtime and make bill payments. After achieving great success in Kenya, M-Pesa began to expand within the African continent and beyond. It is now available in the following ten countries:

  1. Kenya (2007)
  2. Tanzania (2008)
  3. DRC (2012)
  4. India (April 2013)
  5. Mozambique (May 2013)
  6. Egypt (June 2013)
  7. Lesotho (July 2013)
  8. Romania (March 2014)
  9. Albania (May 2015)
  10. Ghana (August 2015)

Recent Blogs Covering the M-Pesa Model:

Vodacom Discontinues M-Pesa in South Africa
Center for Financial Inclusion at ACCION, 17 June 2016

This blog post examines the reasons why M-Pesa did not achieve the same level of success in South Africa as in other countries.

“Why has M-Pesa not been as successful in South Africa? According to the Global Findex, only 34 percent of adults in sub-Saharan Africa have banks accounts, and of those with bank accounts only 12 percent use mobile money services. The picture is different in South Africa. Mobile phone usage is much higher in South Africa than in the rest of the region – nine in ten South Africans own a mobile phone – and a third of these are smartphones, according to figures from the Pew Research Center. At the same time, 70 percent of adults in the country have a bank account, and overall South Africa has the most technologically advanced, financially included, and accessible banking system on the continent. In short, many people in South Africa can already do what M-Pesa enables – sending money to people in another location quickly, safely, and economically.”

Mobile phone being used for mobile money transfer. Photo by Rachel Strohm.The Replication Limits of M-Pesa in Latin America
CGAP Blog by Pablo Garcia Arabehety, 20 July 2016

This blog post looks specifically at Latin America and how other business models have dominated in this region to achieve what the M-Pesa model has done in other regions.

“M-Pesa ceased operations in South Africa on June 30, shedding light on an ongoing discussion: Is the challenge of replicating the success of the M-Pesa model in Kenya more about implementation and management or about context and market structure? The fact that the same parent company has not been able to replicate its success story in South Africa seems to support the latter explanation.

In Latin America and the Caribbean (LAC), we have been dealing with this dilemma for a long time, and the evidence points to context as well. M-Pesa brought innovations to East Africa that other players had already brought to most LAC markets."

M-Pesa: Varying Degrees of Success with Mobile Money
Blog post by Swarnava Adhikary, Euromonitor International, 25 March 2016

This blog post features a video discussing why M-Pesa has been met with a lukewarm response in India.

“M-Pesa, a mobile-phone based money transferring service, has been popular in Kenya for some time and was launched in India in 2013. However, this service has not proved as popular in India due to the country’s regulations imposed on mobile money services. There was also a problem in getting word to India’s diverse rural population. Vodafone, the owners of the service, have implemented strategies to make M-Pesa more successful in the country, where mobile money service has immense potential.”

Gateway Resources:

For further reading on the M-Pesa model, mobile banking and payments and remittances, check out these publications:


The Safaricom M-Pesa Pilot Test
Understanding the success factors behind Safaricom’s M-PESA
May 2015, MicroSave

The M-PESA Effect: Are Financial Transaction Costs a Barrier to More Effective Insurance for Families in Kenya?
Summary of findings from household survey on how M-Pesa has affected the lives of Kenyans
Nov 2015, Financial Sector Deepening Trust Kenya (FSDK)

Enabling Mobile Money Transfer: The Central Bank of Kenya’s Treatment of M-Pesa
Discussing Central Bank of Kenya's outlook on M-Pesa
Aug 2014, Alliance for Financial Inclusion (AFI)

Designing Mobile Money Services: Lessons from M-PESA
Analyzing the success of M-PESA mobile money service in Kenya
Jan 2009, Innovations


A Quantum Leap Over High Hurdles to Financial Inclusion: The Mobile Banking Revolution in Kenya
Examining the real impact of technological and business model innovations on poverty reduction
Jun 2016, The SWIFT Institute

Are Mobile Money Wallets Really Customer-Centric?
Findings from a survey of customer experiences in rural and urban India
May 2016, MicroSave

Gateway Guide to Mobile Banking
Highlighting noteworthy resources on mobile banking
Feb 2016, FinDev Gateway


Payment Aspects of Financial Inclusion
Seven guiding principles to help countries increase financial inclusion through payment services
Apr 2016, Bank for International SettlementsWorld Bank

Del Otro Lado: Financial Behavior of Households Receiving International Remittances in the Mexico Financial Diaries
Recommendations on leveraging migrant remittances for wealth building
Apr 2016, Multilateral Investment Fund (MIF)Bankable Frontier Associates

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