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Mobile Money

By Philip Levin

Safaricom M-PESA’s H1 FY13 Results: A portrait of a maturing mobile money service

M-PESA contribution to overall Safaricom revenue

Despite the emerging success of a number of mobile money deployments outside of Kenya, Safaricom’s M-PESA remains a bellwether for the industry. Safaricom’s half year 2012 – 2013 financial results released yesterday provide a window into the evolution of the M-PESA service and the new challenges it faces.

M-PESA contributes more revenue to Safaricom than data and SMS combined

M-PESA now comprises 18% of Safaricom revenue, more than SMS (8%) and data (7%) combined. Its 32% revenue growth rate exceeds that of voice, mobile data, and SMS.

Registered user growth has plateaued: Safaricom must deepen usage within a largely static base

One drawback of success is that user growth can be difficult to maintain. Safaricom has already registered 79% of its GSM base onto M-PESA, so finding new subscribers can be difficult. M-PESA yearly user growth has flattened to just 2.4% over the past year versus 69% just two years ago.

The focus has turned to driving activity within the existing base – activating customers and deepening usage for those customers.  Safaricom claims that 30-day active customers have increased 14% to 9.7 million. Activating the remaining 5.5 million inactive subscribers, and driving transactions within the active base will be a focus. Industry watchers will be curious to see what role new products and partnerships have to play in deepening usage.

B2C and C2B transactions are emerging as contributors

The H1 results reveal that M-PESA is more than a P2P story.  While P2P (C2C) transactions still account for a majority of volume, efforts to connect to formal businesses appear to be yielding results. C2B transactions now accounts for 7.4% of value transferred and B2C contributes 5.5% [1].

More cash is being converted into digital form and living within the M-PESA ecosystem

Safaricom’s H1 F13 results reveal that in September 2012 Ksh. 69 bn was deposited into M-PESA accounts while only Ksh. 62 bn was withdrawn back into cash. This implies that Ksh. 7 billion (US$82 million) of cash was converted to digital form in September alone and now lives inside the electronic M-PESA ecosystem.

For those that believe in the importance of digital currency for financial inclusion, the net absorption of cash (US$8.45 per active user in September 2012) should be seen as an important trend.

What do the M-PESA results mean for the mobile money industry? We welcome comments from practitioners and industry observers below or you can email us at

Photo: M-PESA contribution to overall Safaricom revenue

[1] See slide 24 of H1 F13 presentation, showing contributions of each type of transaction relative to Kenyan GDP.


  1. The M-PESA results clearly reveal a bright future for mobile money deployment in african countries.It also reveals the importance of mobile money transactions in term of revenue for mobile operators. Thus demanding special efforts for them to promote and develop this new activity which seem more profitable than ordinary activities: voice, data transmission and sms.

  2. MPesa’s strategy for retail payment needs improvement! At the end of the day MPesa can only break the cash-dependence cycle and thrive as a true ecosystem if there is a secure, fast, and user friendly to use your phone to pay a merchant.

    Ultimately, for mobile money to be usable in stores a different transaction experience and way of managing merchants is needed. Merchants are fundamentally different from Agents (their business is to sell a good/service and the transaction is just a means to this end). They are also fundamentally different from end-users (a P2P transfer isn’t designed to pay merchants- it’s too slow, not transparent, and can be easily reversed).

    Today only a handful of mobile money services (for example Celpaid in Ivory Coast and MobiPay in Namibia) successfully offer retail payment as part of their service. What these services have in common is they use a TagPay platform which includes the Near Sound Data Transfer (NSDT) technology that makes the retail transactions possible.

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