Kenyan mobile phone-based money transfer service M-Pesa has recently formed a strategic partnership with Amazon, to offer worldwide remittances.
Through its partnership with the e-commerce giant, M-pesa seeks to expand its business across Europe and could benefit from backup from Vodafone and Vodacom, Safaricom’s global shareholders to penetrate the European markets, and set itself apart from other traditional banks.
In May 2021, the fintech giant had hinted about this partnership, stating that the move was part of its efforts to expand its global reach and bounce back from a first profit decline in a decade.
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M-Pesa is currently available in Kenya, where it has more than 30 million customers, as well as other African countries such as Egypt, Mozambique, Lesotho, Ghana, Tanzania and Democratic Republic of Congo.
The mobile money service now serves about 51 million customers across seven countries in Africa, with a safe, secure and affordable way to send and receive money, top-up airtime, make bill payments, receive salaries, get short-term loans and much more.
It also enabled users to conduct transactions valued at more than $314 billion annually, and is responsible for 60% of formal remittances in Kenya and 20% in Tanzania.
Established on the 6th March 2007 by Vodafone’s Kenyan associate, Safaricom, M-PESA is reportedly Africa’s leading mobile money service with more than 604,000 active agents operating across different African countries. Following the success of its mobile money, it is now positioning itself in the remittance market as it seeks to replicate its African successes in new markets.
According to Aly-Khan Satchu, Economist and CEO of the investment advisory firm Rich Management Ltd, he disclosed that M-Pesa is effectively targeting a two-way flow, following its recently announced partnership with Amazon.
In his words, “With respect to inward remittances, I think M-Pesa has to look at charges if it is to capture a significant market share and a more sophisticated domestic platform which provides a suite of investment opportunities for inward remittances. Safaricom has the platform and point-to-point advantage and the scale to make this all come together”.
With forecasts showing that global money transfer markets will cross the trillion dollar mark as soon as next year, players in the remittance space are now keen to ring-fence their slice of the pie.
In June last year, Safaricom and Visa rolled out a new virtual card, called “M-PESA GlobalPay”, that enables customers in Kenya to shop using their mobile money account at more than 100 million merchants across 200 countries through Visa’s global network.
With over 15 years in financial services, M-Pesa has evolved from simple money transfer to become a robust payments platform and driver of financial inclusion for Kenyans.
M-Pesa spread quickly, and by 2010, it had become the most successful mobile-phone-based financial service in the developing world. By 2012, a stock of about 17 million M-Pesa accounts had been registered in Kenya. The service has been lauded for giving millions of people access to the formal financial system and for reducing crime in otherwise largely cash-based societies