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Mobile money service M-Pesa is usually one of the first names mentioned when it comes to revolutionary African mobile products. It has however been largely restricted to use within the individual countries it operates in. Until now, that is.
M-Pesa customers in Kenya and Tanzania can now send and receive money from each other at the same cost as sending it locally.
Speaking in Dar es Salaam, Vodacom Tanzania Managing Director Rene Meza said that the large amounts of money flowing between the two countries was evidence of a market for the cross-border service. “Statistics from the World Bank, (2013) indicate that Tanzania sent approximately TZS 200 billion (approx US$109-million) to Kenya through formal channels. Estimates would indicate that more than twice that amount was transacted via informal channels including bus drivers, friends and family” he said.
“We have looked into the hurdles that our customers need to overcome in order to send and receive money across to our neighbors in Kenya and have come up with a safe, secure and convenient way to do so. From today […] he or she can do so directly from their M-Pesa wallet and… from the comfort of their home, anytime the need arises”.
Driving this large remitance market is the fact that Tanzania is home to approximately 300 000 Kenyans who send funds to their home country via informal ways and channels including bus drivers, friends and family. There is also a sizeable part of the Tanzanian population that has chosen to educate their children in Kenya and rely on the very same means to transfer money.
M-Pesa is offered by Vodacom Tanzania Limited and Safaricom in Kenya — the region’s two biggest telecom operators. Vodacom has approximately 65% market share of mobile financial services in Tanzania whereas Safaricom commands over 80% share in Kenya. The former has approximately 7-million M-Pesa customers while the latter has 18-million.
“We believe that we have launched a new chapter in the continuing growth story of M-Pesa Enabling transactions between Kenya and Tanzania will make it ever-more convenient for businesses and individuals to transact across borders and unleash the transformative power of a first of its kind cross-border payment system,” said Safaricom’s Chief Operating Officer Bob Collymore
Of course, some adjustments have had to be made to the standard M-Pesa offering. When someone is about to send money from Tanzania for instance, they will be shown the Kenyan Shillings equivalent value of the money that the customer in Kenya will receive. Vodacom claims the currency conversion will happen immediately and the money will be available instantly for withdrawal or making bill payments, buying airtime or any other services on M-Pesa.
“Our combined distribution of over 150 000 agents in Tanzania and Kenya will ensure that our customers continue to enjoy the many benefits that M-Pesa offers them today,” says Meza. “This groundbreaking service in the evolution of mobile financial services as we know it today is supported by a fully fledged customer service unit that is reachable 24 hours every day.”
“Kenya is Tanzania’s largest trading partner and it was therefore logical that we activate the service there first,” he adds.