Announced at the start of the year and confirmed in March, M-PESA was officially launched by Vodacom and Nedbank today.
M-PESA is a mobile money solution which has been successful in other African markets, as well as in Afghanistan; enabling customers to transfer money from person to person using a cellphone.
“There are other cellphone banking products and money transfer services out there, but there quite simply is nothing like M-PESA,” said Pieter Uys, Vodacom Group CEO. “As anyone can receive M-PESA without having to be an M-PESA customer or even Vodacom subscriber, it has the power to reach all cellphone users.”
Uys added that the service is designed to include those who don’t have access to bank accounts.
“In South Africa, cellphone penetration is extremely high, and yet it is estimated that more than 13 million economically active South Africans do not have a bank account,” said Mike Brown, Nedbank Group Chief Executive.
How does it work?
In a statement Vodacom and Nedbank explained that the service works by loading money onto a Vodacom cellphone at any M-PESA outlet.
Outlets are retail stores, spazas, community service containers, and all Nedbank branches.
Customers can register for the service as well as deposit money into their M-PESA account at such outlets. Money can also be withdrawn as cash.
Once you have money in your M-PESA account you can send it to any other cellphone in South Africa. The receiver can redeem the cash at an M-PESA outlet or Nedbank ATM.
If you’re a Vodacom customer you may also choose to transfer the money to another person. Only Vodacom customers can send M-PESA but anyone with a cellphone can receive it.
At launch M-PESA is offering basic money transfers but Nedbank and Vodacom say they are in the process of implementing additional services such as paying bills and buying goods.
In Kenya and Tanzania M-PESA has been extended to allow customers to pay for school fees, insurance premiums and to put money into savings accounts. Customers there can also receive payments such as salaries and dividends, according to Nedbank and Vodacom.
“By combining the right partners, proven technology and a trusted distribution network, M-PESA is set to revolutionise how money is transferred in South Africa,” concludes Uys.