I think calling the service "M-Pesa" is misleading since a lot of other people are offering the same service.
Here in Tanzania,
"M-Pesa" is the name for the service offered by vodafone,a mobile communications company.
"Tigo Pesa" is the name for the same service offered by tigo,a mobile communication company.
"Airtel money" is the name for the same service offered by airtel,a mobile communication company.
"EzyPesa" is the name for the same service offered by zantel,a mobile communication company.
For the above reasons,i generally call the service offered by these companies as "a banking service managed by mobile phone companies".
"Sim banking" is the name of the service offered by a "traditional" bank called crdb[1] so a more generalized name that accommodates both traditional banks and cellular network operator banks is in need.
Most traditional banks are also offering the same service.
The only thing they all have in common from the user's perspective is that the services are offered through ussd codes[1] meaning they are not tied to mobile phones and they work with any device that supports ussd codes.
I have an application called ussd-gui[4][3] that i use to manage by money at vodafone "bank" using a mobile broadband modem on my linux system.
I think the wiki is specific to M-Pesa, not mobile money transfer services in general. Not sure what about it you consider misleading.
I wonder why they didn't standardize on a single interface. We had trouble integrating with Kenyan providers at a device level at my previous job, since they exclusively use SIM toolkit apps, and - at the time - didn't provide APIs. USSD would have been a godsend. Great work on USSD-GUI.
They act like traditional banks in a sense that you can have them hold your money for you and some give out interest rates!!!.
Their biggest difference with a traditional bank is that their "bank" accounts are tied to phone numbers.
Once they have your money,you can do money transactions more or less the same way you do with a debit/credit card.
You can also have your "bank" accounts on these companies tied to a "bank" account from a traditional bank and you can move your money back and forth between them.
Indeed. Yet another advertisement for a specific company on 60 minutes, that show has turned into a mix of corporate PR and a government mouthpiece. What happened to their journalistic integrity?
M-Pesa in particular in one of many competitors in Kenya. But yet they repeated M-Pesa two or three dozen times in the report and asked people about that specific service by name over and over.
I rarely watch 60 Minutes now. It just annoys me too much. It is like watching CBS Evening News, just blatant propaganda and scaremongering, I miss the BBC, and Al Jazeera (both of which are "strangely" not available in much of the US, so we have to put up with the US version of Russia Today).
M-Pesa got there first and is by far the dominant mobile money system in Kenya, regardless of competitors like Airtel Money. Even people who use Airtel for their phone service will still keep a Safaricom SIM card on hand so they can use M-Pesa.
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As a Kenyan I use it for many transactions, its really nice. The next frontier though is banks adopting the M-Pesa model.
Equity bank, one of the largest and most popular bank in Kenya is issuing sim-cards (it's an MVNO) which can be connected to it's bank accounts, as opposed to M-Pesa where a mobile service provider(Safaricom) is holding the money. This allows more flexibility for both the bank and the customer.
The mobile money landscape is changing rapidly.
A lot of debate's going round over what is M-Pesa and what it isn't. Yes, M-Pesa is the specific variant of mobile money transfer introduced by Vodacom. However, M-Pesa in Kenya is what pushed mobile money transfers to light in Africa. For the longest while it wasn't just successful, but also the only large scale deployment of such a service (At least Half of GDP flows through the service!). Unlike other countries that had continual relaunches, rebrands, and failures, M-Pesa just bloomed. All that led to this brand genericide where it's much easier to talk of M-Pesa rather than account for Tigo, Airtel money, and all other fledgling counterparts. M-Pesa is the 'kleenex' / 'xerox' of mobile money transfers. (African Telecos are always being acquired, renamed, or merged leading to rebooting/relaunching of their mobile money brands. Contrastingly, Safaricom, the telecommunications company that deploys M-Pesa, is remarkably stable and is the biggest earning corporate entity in Eastern & Central Africa)
I hate Hacker News for comments such as yours that do little to further the discussion. You do little to explicate on what makes the statement wrong. It's about constructive dialogue, not notching points. I should have been more explicit. The total volume of transactions through M-PESA is comparable equivalent in worth to half the GDP.
Perhaps you should start by actually making a statement that has value and that is supported by data and is actually true, before you put the burden on me to do your job explaining your points, when you're the one making a wrong statement in the first place. But I'll oblige.
First, even in your correction, you're still making a pretty useless point that is misleading to people who don't understand the nuance of the definition of GDP, don't have an understanding of MPESA (i.e. the target audience of your comment), and implies mpesa is far more significant than it actually is. i.e. it misleads, whether you like it or not. It's so misleading you probably took it as a fact when you read it the first time, and only saw the mistake when I told you it was wrong and you looked it up. Why not correct your statement with a useful quantifiable answer?
So why is it a pretty useless point? Well look, if I hand $1 to my brother, and he hands it back to me right away, and we do this 100000 trillion times on a digital money system we designed (say, a simple database with a simple algorithm to execute all these trillions of payments), we'd be able to say, 100% truthfully, that our silly payment system has a total volume of transactions that far exceeds GDP, or the entire world economy in this century so far, for that matter. It's a meaningless statistic, and it's an apples/oranges comparison because there was 0 added value in any of the transactions between me and my brother. GDP measures added value, mpesa transactions measured in volume don't. Why say 'mpesa's non added value figure is x percentage of the country's added value figure' at all?
For example, take sinopec. Chinese company with nearly $0.5 trillion in revenues. Imagine its profit margin is say about 5%, then that means that it has nearly 0.5 trillion in expenses, too. So this company processes about $1 trillion in value, every year. The chinese GDP is about $7 trillion. It'd be completely to say this single company which employs 0.02% of the Chinese population, processes money totalling about 1/7th of China's gdp, even though it's a factually true statement that's completely meaningless, when the real contribution to the 7 trillion Chinese gdp is actually just about 7 billion.
Either you express a statement of how much of added value is transacted on mpesa and take that as a percentage of total added value (GDP), or you measure the percentage of total volume that is transacted on mpesa, as a percentage of the total volume of all payment systems in the country, without getting into added value/gdp at all.
If you do so, you'll find mpesa is pretty small, the Kenyan central bank has pretty decent data. For example, in August mpesa handled about 250b kes in value, a tiny bit less than ACH, and an order of magnitude less than RTGS in Kenya which handled about 2.8 trillion. And those are just the electronic payment systems where mpesa looks to be less than 7%. Let's not forget the most recent reports are that 94% of transactions in Kenya are made with cash (which, expressed in a silly 'volume of cash transactions as a % of gdp' metric, would constitute a figure that's likely more than a tenfold of GDP, but again it's meaningless).
And I'm not even getting into the fact that a large portion of economic activity in Kenya isn't part of GDP, as the grey economy often is substantial in developing countries, or the large amount of double counting in the figure you're referring to.
Mpesa is awesome, I'm glad it's here, it'll keep on growing and become more important with time. But let's not sprinkle these bs apples/oranges metrics around on HN, the economist and the like take care of that just fine on their own. The mpesa story doesn't need this hyperbole, and its growth statistics are impressive and promising on their own.
You didn't even cite the entire sentence... Feel free to elaborate as to what is false as I don't see it, unlike your earlier statements.
And no, it's not facetious at all. It's a theoretical example of how one can make completely honest and truthful statements, that are misleading and insignificant, an example you can obviously agree with because it is indeed a silly and insignificant statement, yet completely truthful that our bookkeeping system could indeed register the change of ownership of a $1 bill by processing trillions of money transfer orders in a given day, generating a volume of transactions that exceeds GDP. There's nothing false about this.
The statements by you that express mpesa transaction volume as a percentage of gdp are as meaningless without further data. And if you do add the further data, as I have in my post (conveniently ignored by you), you'll find mpesa is much less significant than your statement would lead people to assume. That's why I called your statement misleading and called you out on making the statement, despite the fact your corrected statement is 100% truthful.
I won't require you to agree with any of my points, that's up to you. But you can hardly call me facetious when I called you out on an error in your statement which you corrected, in my first post, and did the homework you should've done by adding context to your empty statements, in my second post. If anything, I'm taking this much more seriously than you, facetiousness then is quite an ironic accusation coming from you.
I'm in Nairobi, Kenya right now on a business trip to Safaricom and I can tell you that M-Pesa is huge. In fact, the application we're building has an M-Pesa payment component which will be leveraged to pay hundreds of thousands of smallholder farmers in M-Pesa instead of regular cash.
I just read "The Next Africa"[1] which had a good bit on M-Pesa and one of the cool offshoots, M-Kopa[2], which is offering a pay as you go solar lights/radio/sim card all paid for with M-Pesa. It sounds like it could be as big of a deal as the Rural Electrification projects of the last century.
This is completely ubiquitous in Kenya. Highly recommend chatting with friends/acquaintances from there to understand how the country really runs on "Pesa", as they call it.
A cool Kenyan Uber driver gave me an amazing unintentional lecture on mobile payments the other day. It's just amazing to see innovation force its way through when the establishment sucks (ie, most Kenyans being essentially locked out of the financial system prior to this).
The big takeaway is how ubiquitous mobile phones are. Everyone might not have water or a toilet, but they will have a cell phone since a cell phone is cheaper than anything else.
This is super powerful, @magic_man, in terms of orienting the field around designing solutions that meet users where they are (vs. approaching design from a "remediation" vantage point). I previously worked for a non-profit working to build the financial capability of low-income youth here in America. We discovered that 85% of youth have mobile phones, though a much smaller percentage belong to families that are connected to the financial mainstream (many use fringe banking services). This was a critical insight for us; it led us to design a smartphone application that issued teens digital challenges designed to build financial health. Platform decision-making is paramount.
the whole time I was watching the 60 minutes feature I was thinking, sure this is great for the people but what about the cell/mobile providers behind it all? How do they pay for their cell network access? Who is (must be) raking it in on that front/the gateway/infrastructure to have all of this work on top of?
The financial services are offered by the telcos themselves, who run their own infrastructure. There's no intermediary. M-Pesa by Safaricom, Airtel Money by Airtel, and so forth.
East Africa and some parts of Asia have had mobile money solutions like this for over a decade. They are so ubiquitous in those parts of the world that many people don't even bother to open bank accounts any more.
The rest of the world is still working on "fintech"... They don't like to talk or hear about M-Pesa. So each time they do, it's a bit of a shocker.
I think calling the service "M-Pesa" is misleading since a lot of other people are offering the same service.
Here in Tanzania,
"M-Pesa" is the name for the service offered by vodafone,a mobile communications company.
"Tigo Pesa" is the name for the same service offered by tigo,a mobile communication company.
"Airtel money" is the name for the same service offered by airtel,a mobile communication company.
"EzyPesa" is the name for the same service offered by zantel,a mobile communication company.
For the above reasons,i generally call the service offered by these companies as "a banking service managed by mobile phone companies".
"Sim banking" is the name of the service offered by a "traditional" bank called crdb[1] so a more generalized name that accommodates both traditional banks and cellular network operator banks is in need.
Most traditional banks are also offering the same service.
The only thing they all have in common from the user's perspective is that the services are offered through ussd codes[1] meaning they are not tied to mobile phones and they work with any device that supports ussd codes.
I have an application called ussd-gui[4][3] that i use to manage by money at vodafone "bank" using a mobile broadband modem on my linux system.
[1] http://crdbbank.com/tz/alternative-banking/simbanking.html
[2] https://en.wikipedia.org/wiki/Unstructured_Supplementary_Ser...
[3] https://github.com/mhogomchungu/ussd-gui/blob/master/icons/u...
[4] https://github.com/mhogomchungu/ussd-gui