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Three keys to M-PESA’s success: Branding, channel management and pricing

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M-PESA, a mobile-phone-based electronic payments system, has been adopted by 8.5 million Kenyans in the relatively short span of three years. Surveys of users show it is a highly valued service, and Safaricom continues to expand the range of applications for which it can be used. This paper explores how Safaricom, the mobile operator that commercialises M-PESA, managed to create enough traction with both customers and retail stores, building trust and overcoming the adverse network effects that afflict new payments systems. The focus is on three key aspects of M-PESA’s success: (i) creating awareness and building trust through branding; (ii) creating a consistent user experience while building an extensive channel of retail agents offering cash in/cash out services; and (iii) a customer pricing and agent commission structure which focuses on key drivers of customer willingness to pay and incentivises early adoption.
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Keywords: M-PESA; mobile money transfer; mobile payments; remittances

Document Type: Research Article

Publication date: December 1, 2010

More about this publication?
  • Journal of Payments Strategy & Systems publishes peer-reviewed articles and case studies analysing best practice, emerging issues and new thinking in how to develop a profitable, customer-focused payments strategy. It examines major issues facing the corporate, wholesale and retail payments industry from a business, risk and operational perspective.

    Edited by renowned payments expert Alec Nacamuli and guided by an eminent Editorial Board, each quarterly 100-page issue provides practical, detailed analysis of developments and trends in the payments business, regulation, new entrants and technologies and how to bring them all together to define your payments strategy, as well as actionable advice and ‘lessons learned’ from fellow professionals on how payment processing systems can be leveraged to maximise profitability, security and efficiency and minimise risk. It contains no advertising and no advertorial.

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