Monday, May 30, 2016

M PESA The future of money an Alternative to banks

   Time to invest in the future 

 Of all the powerful things and ways the internet offers most come upon the people by surprise.
M-PESA is one of these things that comes along and changes things, It is one of those things that comes along to STAY andchange the way we do things, Net Flicks, Facebook, Google, Uber, Cars, light bulbs, were all novelties but became tendencies then became a must have that we can't do without.

M PESA is without a doubt the FUTURE OF MONEY

M-Pesa (M for mobile, pesa is Swahili for money) is a mobile phone-based money transfer, financing and microfinancing service, launched in 2007 by Vodafone for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania.[1] It has since expanded to Afghanistan, South Africa, India and in 2014 to Romania and in 2015 to Albania. M-Pesa allows users to deposit, withdraw, transfer money and pay for goods and services (Lipa na M-Pesa) easily with a mobile device.[2]
Pedestrians walk past an M-PESA mobile banking shop in downtown Nairobi, Kenya, on May 12, 2009. (NOOR KHAMIS/REUTERS)
M pesa kiosk 2009...Today 10000 of them and bankers are not happy
The service allows users to deposit money into an account stored on their cell phones, to send balances using PIN-secured SMS text messages to other users, including sellers of goods and services, and to redeem deposits for regular money. Users are charged a small fee for sending and withdrawing money using the service.[3] M-Pesa is a branchless banking service; M-Pesa customers can deposit and withdraw money from a network of agents that includes airtime resellers and retail outlets acting as banking agents.
M-Pesa has spread quickly, and by 2010 had become the most successful mobile-phone-based financial service in the developing world.[4] By 2012, a stock of about 17 million M-Pesa accounts had been registered in Kenya.[1] The service has been lauded for giving millions of people access to the formal financial system and for reducing crime in an otherwise largely cash-based society.[5]

What Investors Say?
The latest announcement from M-Pesa warrants additional consideration particularly in the context of Latin America, the Caribbean and the U.S. In Latin America and the Caribbean (“LAC”), 70-80% of the population is unbanked or underserved. In the U.S. there are also significant numbers of people who are unbanked and underserved, particularly in minority communities.
Several possible implications:
1. South to North Technology Transfer. M-Pesa’s expansion into the UK is an interesting example of technology transfer. Typically, a “transfer of technology” involves the exchange of technical and scientific knowledge from North to South ie from developed to developing countries. Given the growing gap in income inequality in developed countries, advocates and policy makers in developed countries (North) may start looking at developing countries (South) for possible mobile phone based tools to help deal with social and economic inequalities at home.
2. South to South Technology Transfer. M-Pesa stands out in the mobile money race. In 2012, of the 120 services identified by the Consultative Group to Assist the Poor (“CGAP”) only 11 were successful. This is due to several reasons including: lack of sustainability, lack of infrastructure investment by business and government, as well as telecommunications and banking regulations. Although there exist a few mobile money services in the region ( ie, Digicel’s TchoTcho), given the near 100% rate of mobile telephony in Latin America and the Caribbean, the use of mobile tools to help promote financial inclusion and the development of new markets present important opportunities.

3. Small & Medium Size Enterprises, Remittances and Technology in LAC. Last fall, Mellon Bank of NY hosted an economic development panel where the potential benefits of mobile banking and microfinance in the region were discussed. When viewed together, they were seen as a possible way to increase access to credit, loans, savings and deposits for individuals and small businesses in the region. Mobile money services such as M-Pesa have proven beneficial to economic and social development initiatives.    CGAP recently created a list of Digital Finance Plus services that used mobile money services to provide cost effective basic services such as electricity, water and gas. Mobile money has also impacted remittances. Within immigrant communities, the ability to send money back to ones home country has also been helped by mobile money services; Western Union joined the fray years ago. In Latin America and the Caribbean, Company’s such as Miami- based Yellow Pepper have recognized the opportunity, offering a variety of mobile payment services including transfers, top ups, bill payment, digital signatures and PIN and cardless ATM withdrawals via text message (SMS). These examples deserve further exploration.

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