The story of Mpesa is a great inspiration to many developers given that it all started as a software development project. The mobile money service has revolutionized the marketplace by providing an easy, fast, and secure method of payment. Consequently, M-pesa integration in Kenya is almost mandatory for all entrepreneurs considering online businesses.
You have many payment options to choose from when creating a payment gateway for your online store. However, the greatest consideration for any type of business is the experience and satisfaction of your clients. In Kenya, M-pesa is widely accepted as a secure mode of payment. While they are other mobile banking services, M-pesa remains the most popular method.
We can go on about the popularity of the service but where did all this start? The world today still marvels at the idea and convenience that the concept offers to users. Let us now look at the journey of the first mobile banking service in the country.
The History of Mpesa
The concept of transferring money via the phone started with research in 2002 at Gamos. The researchers were investigating the concept of sharing airtime among subscribers. The concept was popular in Botswana, Uganda, and Ghana. Kenya soon adopted the same concept where subscribers would share their airtime with their friends and relatives. The service is still available to mobile phone users to date.
The recipients would either use the airtime or resell it for a profit. Mozambique pioneered the official airtime sharing service. The concept of transferring money via mobile devices was born out of the airtime sharing service. The researchers at Gamos continued to investigate further on how financial institutions could improve their services through mobile services.
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The researchers extended their study to the Kenyan market while paying attention to creating a money transfer service. One of the major shareholders at Safaricom, Vodafone began its pilot study of the concept of money transfer in 2015. However, the story of Mpesa did not begin in Kenya until a student at Moi University presented a software development project.
The project represented the full process of transferring, receiving, and withdrawing money from a mobile phone. Safaricom was quick to approach the student and buy the idea. The student agreed to transfer ownership rights to Safaricom. The company developed the idea further and launched Mpesa in 2007.
Major milestones of the M-pesa platform
When Safaricom first introduced Mpesa, the service was meant to help users borrow and repay small amounts of cash easily. The service would help microfinance institutions to offer small loans at affordable rates. It would then be easy to follow up on payments and reduce default rates by reaching borrowers on phone. However, the outcome was not as expected. Microfinance institutions encountered challenges with the service.
The initial Mpesa users preferred to use the service to make payments and transfer money instead of borrowing money. Consequently, Safaricom relaunched the service to serve the preferences of users. Since then, Mpesa is known as a convenient was of sending and receiving money, paying bills, receiving payments from clients, and saving money. Safaricom has partnered with all major banks to create a platform for Mpesa users to transfer money from their bank accounts to their mobile phones and back. As online businesses take root in the country, M-pesa integration in Kenya has become a critical service to online entrepreneurs.
Mpesa was launched in March 2007 and by November of the same year; the service had more than 1 million users. By the first anniversary, the service was nearly hitting 2 million users. Safaricom started winning awards almost immediately for the service including the Stockholm Challenge Awards and the Annual GSMA Global Mobile Awards. Mpesa has won several awards for being the best mobile transfer service among its competitors in the region.
By September 2008, the number of active Mpesa users had reached above 4 million. The number increased further to more than 10 million by the year 2010. The partnerships with banks and service providers such as KPLC, supermarkets, schools, and hospitals contributed to the rapid increase in the number of users. Mpesa has moved on to global partnerships with services such as Western Union and PayPal. Consequently, the number of active users had more than doubled to over 20 million by the end of 2018.
Mpesa has not only taken root in Kenya but expanded to other countries as well. Vodacom launched the service in Tanzania a year after it was launched in Kenya. Although the number of active users in the country is not as high as the number in Kenya, the service has been growing over the years. Mpesa has also entered other international market including India, South Africa, Egypt, Afghanistan, Lesotho, and Mozambique.
Mpesa Integration in Kenya
Despite the popularity of the mobile money service, some business owners are still reluctant to use it for online payments. Such entrepreneurs prefer card payments for online transactions. Why should you consider M-pesa integration for e-commerce? The benefits of this mode of payment will depend on your type of business. If you target the Kenyan market with your products or services, then Mpesa payments must be on top of your list of payment options.
One way to choose a payment method is to investigate its safety and convenience to clients. Mpesa users know the need to keep their PIN code secret. Cases of Mpesa are rare because the service provider has been improving security measures over the years. It is possible for clients to reverse transactions and report any mysterious activities on their Mpesa account. Hence, you will not spend much time and money convincing clients that the payment method is safe.
Completing transactions through Mpesa is easy and fast. In addition, M-pesa integration in Kenya is affordable and fast. If you pick the right developers, you can start receiving Mpesa payments within days. However, the duration of the integration process will depend on the features of your e-commerce platform. Integration services are readily available to entrepreneurs. Safaricom Limited has made it easy to integrate the PayBill platform on websites. However, you can also integrate Mpesa as one among several payment methods via a third party.