Media Kit

Fb Share

In March 2012, M-PESA, a mobile phone based electronic money transfer and payments service marked five years since its commercial launch in Kenya by Safaricom, the leading mobile phone service provider in Kenya.

It is no secret that one of the main functions of mobile money agents such as those in partnership with Safaricom is to perform cash-in/cash-out transactions which cannot be executed without sufficient reserves of both -e-money and cash at the agent outlets. E-money liquidity and cash liquidity are therefore key areas of concern in a mobile money deployment.

With the transfer of the M-PESA Agent Administrations functions mid-year  last year from the New Products Division to the Consumer Business Unit that previously primarily handled airtime distribution, and a shift in agent recruitment policy that saw an upsurge in new M-PESA agent outlets spread across all channels, Safaricom has found it increasingly challenging to enforce the set liquidity thresholds across the agent network.

In the last two weeks, out of the 37,000 agent outlets, more than 7,000 had been suspended by Safaricom where the affected agents were perennially holding e-value of KSh10,000 (US$120) or less. The M-PESA system has a means of automatically freezing an agent’s till.  It was not uncommon for an M-PESA customer wanting to do a cash-in transaction of Ksh20,000 (US$240) to visit four or more agent outlets and make deposits in small bits in order to get the desired e-value, making a painful experience of an otherwise great service.

With the accepted e-value holding being Ksh30,000 (US$360), agent’s would at times refuse to perform a cash-in transaction when their e-value holding got depleted to this threshold for fear of being penalized through closure, making e-value even more scarce, a sizable amount being the total sum of the reserves protected by agents to forestall not being utilized.

Banks could perhaps free the middle class and banked M-PESA customers from the aforementioned liquidity trap, since a customer directly obtains electronic value from their bank account and into their M-PESA account without having to visit an agent outlet. There are currently over 25 banks that have partnered with Safaricom to have customers transfer money between their bank and M-PESA accounts.

The current 14.5 million M-PESA customers translate to an average of 390 customers per agent, a significant drop from 625 customers per agent in 2009 and 2010 at the peak of M-PESA agency profitability, and when agents were self-propelled towards being well stocked.

Related Content

User Comments – Give us your opinion!
Products & Services

Infobip Mobile Payments - Centili

http://global.networldalliance.com/new/images/products/6115.png

6115/Infobip-Mobile-Payments-Centili

Total-Mobile Swipe

http://global.networldalliance.com/new/images/products/6203.png

6203/Total-Mobile-Swipe

QwickPAY Mobile POS

http://global.networldalliance.com/new/images/products/4293.png

4293/QwickPAY-Mobile-POS

mMoney

http://global.networldalliance.com/new/images/products/7039.png

7039/mMoney

Digital Signage Application – WWS Seegnage Manager

http://global.networldalliance.com/new/images/products/6221.png

6221/Digital-Signage-Application-WWS-Seegnage-Manager

White labeled mobile payment platform

http://global.networldalliance.com/new/images/products/6117.png

6117/White-labeled-mobile-payment-platform

MokiTouch - iPad and Android Kiosk App

http://global.networldalliance.com/new/images/products/5405.png

5405/MokiTouch-iPad-and-Android-Kiosk-App

Software Solutions

http://global.networldalliance.com/new/images/products/6039.png

6039/Software-Solutions

Cellum Bill Payment

http://global.networldalliance.com/new/images/products/6739.png

6739/Cellum-Bill-Payment

Total-Mobile Merchant Services

http://global.networldalliance.com/new/images/products/6199.png

6199/Total-Mobile-Merchant-Services

Mobile Payments in Africa

Latest posts by George Obera
George Obera
Based in Kenya, Obera is an experienced mobile money and payments professional who was a part of the team that built the award-winning M-PESA Mobile Money Deployment.
CONNECT 2014 Mobile Innovation Summit
Request Information From Suppliers
Save time looking for suppliers. Complete this form to submit a Request for Information to our entire network of partners.