Transferring money by mobile phone
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CTA. 2008. Transferring money by mobile phone. Rural Radio Resource Pack 08/4. Wageningen, The Netherlands: CTA.
Permanent link to this item: http://hdl.handle.net/10568/57380
In Kenya, money transfers to friends, family or for business are now possible using mobile phones.
Transferring money by mobile phone Cue: If you need to send money to someone, how do you do it? Maybe you use a commercial company like Western Union or Moneygram. You might do a bank transfer, if you have a bank account, or you could give the money to someone who is travelling to the right place. But transferring money is often a risky or expensive process, especially for those living in rural areas. But what if you could send money just by making a call on a mobile phone? For people in Kenya, that is now possible, using a system called M-Pesa. The system has been set up by Safaricom, one of Kenya?s mobile phone networks which is a partner of Vodafone. To find out more about how it works, Winnie Onyimbo went to visit the Safaricom office in Nairobi. But before that, she got the opinions of an M-Pesa user. IN: ?I?m Anne Muthoni Kinyanjui. I?m a farmer? OUT: ?means that their money is safe.? DUR?N: 5?57? BACK ANNOUNCEMENT: Pauline Vaughan (pron. Vorn) of Safaricom in Kenya, talking to Winnie Onyimbo. Her report comes from a resource pack produced by CTA. Transcript Kinyanjui I?m Anne Muthoni Kinyanjui. I?m a farmer. I have children in central Kenya, so when I have money I have to help them, so I send them with M-Pesa instead of walking. So I use M-Pesa so much. Onyimbo Do you also collect money using M-Pesa? Tell me how that works. Kinyanjui My children sometimes send me money. Then, they tell me ?We have sent money.? So you go to the nearest M-Pesa. So, because I have registered, I carry my ID and go and collect it. Your message, which is in your phone, it has to be accompanied with ID, so you get your money. Onyimbo Is it fast or does it take time? Kinyanjui It is very fast. Onyimbo OK, how much does it cost for you to send money, for example? Kinyanjui Only 30 shillings. One dollar is 70. It is less. Onyimbo What kind of ways were you using to send and receive money before M-Pesa? Kinyanjui With the post office. With the bank, to transfer from one account to the other. And it is expensive. Or Moneygram; it is expensive. Onyimbo OK, tell me the advantages of using M-Pesa? Kinyanjui M-Pesa is very easy. There are so many advantages because, it is easier, it is quick, you can receive without paying so much. So it is cheap. Onyimbo Do you have to go far to get the money? Kinyanjui No, anywhere near you where there is an M-Pesa, you get it. Onyimbo Have you experienced any disadvantage of using M-Pesa? Kinyanjui No, no I haven?t. Onyimbo So do you feel it is a safe and secure way to transfer money? Kinyanjui Yes, it is very safe and secure. Onyimbo We are in Ngong. Ngong is in the outskirts of Nairobi. Do you think M-Pesa is suitable for people who live away from the city? Kinyanjui It is, because every town, even if it is a very small town, it has M-Pesa. Onyimbo Thank you. Studio I then spoke to Pauline Vaughan, who is in charge of M-Pesa at Safaricom. I began by asking her to explain in more detail how people can send money using their mobile phone. Vaughan A registered customer can send money to any other mobile user here in Kenya using menus on their Safaricom SIM card. The first thing they need to do is to have money in their account. To get money into their M-Pesa account they would go to an M-Pesa agent. Any of these agents will be able to assist the customer to put money into their M-Pesa account. Using menus on their SIM card, they will be able to choose the mobile phone number of the person they wish to send money to, the amount that they are sending and to identify themselves using a secret PIN number. The money is then transferred to the recipient?s M-Pesa account, and the recipient receives an SMS notification of the transaction. Onyimbo How long does it take to transfer money? Vaughan The SMS to go through will take about 15 seconds. The whole transaction, we can comfortably say that it would take less than a minute to do the end to end transaction. For the customer to actually go to an agent and withdraw their money clearly is dependant on their location and when they choose to. One of the great things about M-Pesa is that you have the ability to choose when to get your money and where to get it from. In fact one of the things that we see is that people will use M-Pesa to deposit money at one place and to be able to travel without carrying cash, and then to withdraw it from another agent at their destination, which means that they have been able to travel safely. Onyimbo How is it different from money transfer services offered by banks or the post office? Vaughan The big difference between M-Pesa and your traditional money transfer services, other than in the banking industry, is that we do offer the customer a stored value account. They can put money into that stored value account and they can get it out at any stage. They have control over it. They don?t have to decide who they are sending it to at the very point that they are at the agent?s shop. That is one of the big advantages of using M-Pesa. Other advantages are the affordability: it is much cheaper to use M-Pesa than the other methods available. It is safe and it is convenient. Because of the fact that once the money is in your M-Pesa account you can do your transactions at any time. We offer the customer convenience to do their transactions 24 hours a day. Onyimbo How is M-Pesa helping the rural woman who cannot access banking services? Vaughan The majority of money transfers in Kenya at the moment, research shows that they are done through informal means and this would particularly apply in the rural scenarios, where rural people do not have access to banking or other money transfer solutions. So this kind of customer would need to be using, for example, bus services, buses or matatus or even using friends and family to transfer money, and for this they are relying on people they know travelling when they need them to be travelling. So what we are doing with M-Pesa is just giving them a much more convenient way to do their money transfer at many more places. So it is very easy for them to go to one of our agents, and cheap, and it gives them the convenience to do their transactions when they want. So if they receive money at the beginning of the month, for example, but they only need to do the transfer later in the month, they can keep it in their M-Pesa account during that period until when they need to do the transaction. It means that their money is safe. End of track.