Mobile Payments

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Date Submitted: 09/25/2012 04:46 AM

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Mobile Money Transfer & Mobile Payments

Abstract Mobile Money Transfer and Mobile Payments in Kenya have grown rapidly, currently reaching over 38 percent of Kenya’s adult population. These providers include Safaricom’s M-PESA, YU’s Yucash, Airtel’s Airtel Money and others such as Tangaza, MobiKash just to mention a few. M-PESA in particular is widely viewed as a success story to be emulated across the developing world with more than 14 million subscribers. This paper seeks to provide a view of how the Mobile Money Transfer technology has affected how money is sent and received, and how it has impacted businesses and changed their business processes and models. It provides a description of the service, its uses, which challenges the service seeks to address and the effects both on individuals and businesses.

Introduction Money transfer has been in existence since the time the money was invented by man. Man has moved from one place to another in search of work and in many cases, leaving the family behind in his hometown. The families’ back home get support from the money the migrant population sends back home. Forms of money transfer have changed over the years. The most primitive method being either carrying the money themselves when they visit back home, via the post office, thorough public vehicles in parcels or simply sending it through a friend or acquaintance. Other transfer services are offered by Western Union, Money Gram, and Rapid Transfer amongst others. How people in Kenya sent money before and after M-PESA

In 2004, Vodafone’s Kenyan affiliate, Safaricom, was awarded match funding by the UK’s Department for International Development to develop services for extending the provision of micro-finance to the poor in East Africa. The software was developed, tested and deployed. M-PESA was first piloted in 2005 in Kenya and was used to disburse loans from Faulu to its clients and then to collect repayments via designated Safaricom airtime agents....