Dancing the M-Pesa jig

Vodacom's M-Pesa system has potential, but it will have to survive the scrutiny of the mass market.

As part of Vodacom's efforts to promote the highly popular M-Pesa mobile money system that was developed in Kenya by Vodafone and the British government, they kindly sent me a R50 voucher by SMS. Some cash for a light lunch, but not enough to warrant a specific trip to the nearest Nedbank branch.

But yesterday, I happened to be passing a Nedbank and I decided to see how the M-Pesa system worked.

When presenting the SMS to the teller, she said: “I know about this... we went on training yesterday. But I can't remember any of it.” She then kindly pointed me to the next teller who apparently puts the 'man' into M-Pesa.

“Oh yes, I was trained on this,” he said. “Please wait a moment while I fetch my machine.”

A few seconds later he was back carrying a portable keyboard that had an aerial on the left hand corner and a small LCD screen in the centre. He then entered the details of the SMS and my cellphone number.

The M-Pesa man suddenly stopped, glanced down, and then started waving the keyboard above his head. He leapt to his feet and danced up and down, while continually waving the keyboard around.

Startled, I stepped back a pace or two, but then figured the bullet-proof glass separating the tellers from the public works both ways.

“I can't find a signal,” the M-Pesa man said. “I'll be back soon.”

SA is hampered by its own legislation.

Paul Vecchiatto, Cape Town correspondent, ITWeb

The M-Pesa man returned a minute or two later apologising and asking for all the information again, because by the time he had found a strong enough signal to complete the transaction he had lost the original information.

So the whole process was repeated, but was a little shorter, as it did not include the signal dance and I received my R50 in cash.

He then asked me if I would like to register for M-Pesa. “It is a very short form. Only I am going to have to go outside for a signal again,” he said.

I declined the offer.

M-Pesa has been highly successful in Kenya, because it is accessible, convenient and cheap.

SA is hampered by its own legislation; in particular, the National Payments Systems Act that means only licensed banks can actually transact money transfers.

Because of this, there is a charge (our banking system loves charges) of R6 for cash withdrawals of between R10 and R10 000 - now think about that. If you send someone R10, they will only get R4 of that.

The fee for registered users is R2.45 and for non-registered users, R10 for amounts between R10 and R1 000 transferred.

We have a knack of strangling our own progress through law.

M-Pesa, I subsequently learnt, can also be used as a means of passing on payment without having to cash it in. So if I had owed someone else R50, I could have passed it on and so on, until someone on the chain needs to cash it in. This could mean the real birth of the cashless society.

Vodacom's plans for M-Pesa include recruiting a number of different outlets, such as chain stores and cellular resellers to act as pay points. They are also concluding deals with Blue Label Telecoms and Smart Call to recruit spaza shops and such to handle the payments in rural areas.

I think M-Pesa has potential. However, it will have to become part of the lexicon of the mass market to get real traction, and that market has a knack of weeding out those services that cost too much or are too cumbersome.

What did I do with the R50? I bought a sandwich and a cool drink and gave the rest to one of Cape Town's notorious beggars, aka “bergies”. I saw him later doing a little jig of his own as he waved what looked like a bottle in a brown paper bag. Obviously, he was trying to find a signal of his own.