A local version of the Kenyan mobile banking system, M-Pesa, was yesterday unveiled by mobile operator Vodacom, in partnership with Nedbank.
M-Pesa enables unbanked customers to transfer money from person-to-person using a cellphone.
The service has 10 million subscribers in the Kenyan region alone. It is also popular in other African countries, as well as Afghanistan.
Hoping to ride on the success of the application in other regions, Vodacom aims to have 10 million M-Pesa users within three years.
Speaking yesterday at the launch event in Midrand, Johannesburg, Vodacom Group CEO Pieter Uys noted that, while other cellphone banking products exist, M-Pesa allows anyone to receive money transferred using M-Pesa without having to be an M-Pesa customer or even a Vodacom subscriber.
Both partners believe M-Pesa will be a critical factor in reaching the unbanked community in SA.
Reaching out
“M-Pesa caters for all South Africans and is specifically designed to include those who do not have access to bank accounts,” noted Uys.
Mike Brown, Nedbank Group chief executive, agreed: “In SA, cellphone penetration is extremely high, and yet it is estimated that more than 13 million economically active South Africans do not have a bank account.
“By providing basic financial services accessible to all, M-Pesa is well positioned to drive economic activity. We also believe it will contribute significantly towards easing many of the burdens currently faced by the unbanked in SA, thus bringing marginalised individuals into the economic mainstream,” he added.
Both Uys and Brown are confident the key success factor of the application lies in its ease of use and security.
How it works
Sending money by M-Pesa is like having instant cash in your hand, explained Uys. Money can be loaded onto a Vodacom cellphone at any M-Pesa outlet. Outlets are retail stores, spazas, community service containers and all Nedbank branches.
At outlets, customers can register for the service and also deposit money into their M-Pesa account or withdraw it as cash. Once customers have money in their M-Pesa account, they can send it to any other cellphone in SA.
The receiver can then redeem the cash at an M-Pesa outlet or a Nedbank ATM. They may also choose to buy airtime, or transfer the money to another person. Only Vodacom customers can send M-Pesa, but anyone with a cellphone can receive it.
“M-Pesa works just like cash, but it is safer and more convenient to transfer. The technology is simple to use on any cellphone and there are no monthly charges or minimum balance requirements - meaning the service will be accessible to everyone across the country,” added Brown. There is also no airtime charge for M-Pesa transactions.
A transaction fee of R2.45 is charged to send money between registered M-Pesa users. Withdrawing cash costs R6. Sending money to non-M-Pesa users attracts a R10 fee.
The application is secured by the use of a secure PIN code number. Customers access their accounts using a four-digit PIN code and, as long as that PIN remains secret, only they can access the account.
Uys also noted that should an M-Pesa user's phone get stolen or lost, the user's account will remain uncompromised and can be accessed again after doing a SIM swap.
Retail reach
M-Pesa's distribution reach extends to PEP Stores, the Pick 'n Pay Group, including Boxer stores, and Massmart, which includes Game and Masscash.
Uys noted that commitments to participate have also been received from several other major retailers, such as Edcon's Edgars, CNA, and Jet outlets, as well as GloCell and Altech Autopage.
Blue Label and Smart Call are also recruiting small and medium-sized outlets across the country, including in many rural areas.
“The number of M-Pesa outlets is growing daily. A level of technical integration is required, which will take some time, so you will see additional retailers start to offer M-Pesa over the coming weeks and months,” he concluded.
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