Heard of M-PESA? Think ApplePay, GooglePal, or Venmo.
Except that everyone is actually using it.
There hasn’t been a good (read: safe and affordable) way to send money within or between countries and this has been a hindrance for people around the world. As mentioned before, financial inclusion can provide economic stability for the poor.
M-PESA, a mobile money service provider, is widely popular in Kenya. Two thirds of the adult population use it to make everyday payments at over 17,600 retailers. It accounts for ~25% of Kenya’s GDP.
How does M-PESA work?
An account is set up with a phone and ID through an authorized M-PESA agent. Cash deposited becomes “e-float” and can be sent to other users instantly. The recipient visits an authorized agent or ATM to exchange the “e-float” for cash. This service is expanding worldwide to 200 countries.
With global participation in M-PESA, innovative business development from within and between populations can take place. Improved networks combined with the ease of transactions can create a platform for entrepreneurship.
The data acquired of users in Kenya can provide a model for M-PESA users in other countries, specifically in tackling issues of flow of cash and liquidity of e-float between rural and urban areas. Implementing predictive analytics could avoid the hassle of M-PESA agents ferrying cash around the country by accounting for population distribution and daily economic activity. This type of analysis could lead to positive effects on GDP, increase financial inclusion, and orchestrate global economic partnerships.
