M-Pesa Case Study


m-pesa case study

Sep 21,  · “M-PESA”: that is a name in global fintech history that can never be erased. Not that anybody would want to. Forever it will be the perfect example of a viable financial ecosystem based on Author: Anna Kuzmina. M-pesa power leveraging service Case Study Help, Case Study Solution & Analysis & M-pesa power leveraging service Case Solution M-PESA AS BUSINESS MODEL INNOVATION: M-PESA is a unique mobile phone banking service, originally started by a. This study reviews key factors that led to the phenomenal growth of mobile money banking services in Kenya using M-PESA, "mobile cash money", the leading mobile money service provider as a case study.

M-pesa power leveraging service Case Study Help - Case Solution & Analysis

In many developing countries it's common for a person to have a mobile phone but not a bank account. In fact, more than 1 billion people fit this description, and the number is only likely to increase. To that end, many companies are considering how to give residents access to banking services via their handsets, m-pesa case study. The GSM Association predicts that bynearly million of the previously "unbanked" will be using some form of mobile banking.

The Harvard Business School case study Mobile Banking for the Unbanked explores two very different examples of mobile financial service models: WIZZITa m-pesa case study startup that teamed with a major bank to provide standard banking services via mobile access to impoverished residents of South Africa; and M-PESAan initiative launched by the mobile network operator Safaricom in conjunction with Vodafone to offer a new type of financial m-pesa case study to the poor residents of Kenya.

Ultimately, the more successful of the two, M-PESA, realized that the intended customers didn't really want bank accounts at all—they wanted effective ways to send money home to their families.

The case's key lesson is the importance of meeting the real needs m-pesa case study your target audience, not the needs as you perceive them, says professor V.

Kasturi m-pesa case study Rangan, who authored the case with research associate Katharine Lee and teaches it in his second-year elective course Business at the Base of the Pyramid. We need education, and so do the poor. We need banks, so they must need banks. But that's the wrong way of approaching it. The ecosystem in which they live is very different from ours.

They're on weekly or even daily wages, and their family circumstances are different. So we've really got to dig in and figure out what their real needs are and their pain points.

WIZZIT entered the mobile banking market in because the mobile phone penetration rate in South Africa was almost percent, thanks in large part to the onset of prepaid services that offer low-cost handsets and the opportunity to buy airtime in advance.

Moreover, m-pesa case study, more than half of South Africa's population had no access to a bank account. This was largely because half of the population lived below the poverty line, and banks, understandably, were not eager to serve a moneyless customer base, m-pesa case study. Still, WIZZIT's founders thought there was a noble and viable business model in bringing banking to the poor, via a mobile banking platform that could be used on even the most primitive cell phone.

They succeeded in finding an engineer to develop the platform, but quickly ran into a major regulatory roadblock, m-pesa case study. Per the South African government, only licensed banks were allowed to take deposits. Time and again the top-tier banks turned them down, so the company ended up teaming with a second-tier bank, the South African Bank of Athens.

The banking partnership proved problematic in that it was hard for a second-tier bank to compete with its larger brethren, which by were forced by government mandate to offer low-cost banking options for the poor. The problem is that this is not the way that the poor think of money. They hardly have any savings. Their main need is money-transfer. In many developing countries, including Kenya, most of the population lives in rural areas, but the majority of bank branches and jobs are in the cities.

To send money home, a city worker had to seal his wages in an envelope and pay a courier to travel for hours to the village. Alternatively, the worker could travel to the village himself, but that meant paying a hefty percentage of his wages for bus fare, plus a day of lost work. Click to watch. Safaricom and Vodafone initially built M-PESA, a money-transfer application that resides on a phone's SIM card, as a tool for microfinance organizations to collect loan payments.

To create a distribution channel, M-PESA franchised thousands of mom-and-pop convenience stores to act as M-PESA agents at their existing places of business, m-pesa case study, such that m-pesa case study could transfer money and receive money conveniently. In order to use the service, the customer hands his money to the agent, plus a transfer fee about 40 cents. Through a computerized process secured by multiple passwords and PINs, the agent transfers the payment to the customer's phone.

Rather than hiring a courier or hopping on a bus, the customer simply hits "send" to transfer the money to a family member's phone. The family member goes to an agent in her village and cashes the money from her phone," Rangan explains. But they wonder how such an application m-pesa case study also be good for the carriers' m-pesa case study line.

After all, the company is not allowed to pay interest on savings or to invest the float, per government orders; Kenya, m-pesa case study, too, has strict banking regulations. And how much revenue can anyone garner from a cent fee that customers pay once a week, if that? Where's the double bottom-line? Perhaps more importantly, the service induces loyalty and additional phone usage. He will stay with Safaricom. Plus, as soon as his wife gets the money, what do you think she's going to do?

She's going to call him on the phone, and that will increase mobile usage! Rangan is currently tracking mobile financial services in India, the Philippines, and Indonesia, where several banks are beginning to see the value of such services and, m-pesa case study, consequently, are m-pesa case study trial partnerships with mobile operators, m-pesa case study.

It's going to be the banks because they have the licenses. In teaching the case in class, the goal is not to put the spotlight on mobile banking, but rather to consider the opportunity of serving an enormous underserved population. Why not harness the power of business to take care of their needs? Mobile Banking for the M-pesa case study. A billion people in developing countries have no need for a savings account—but they do need a financial service that banks compete to provide.

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m-pesa case study


Nov 01,  · M-Pesa: A Case Study in Financial Inclusion. M-Pesa was launched in , and it’s still going strong. The concept of a phone-based money transfer service originated back in , when Author: Matt ฿. Case Study - M-Pesa M-Pesa is a mobile payments system originally developed in Kenya, which effectively offers a banking system based on mobile phones. Launched in , it is now used by million people and estimates suggest that around 25% of . Key events in the development of M-Pesa. AFI Case study | Enabling mobile money transfer | The following case study discusses the period. of development of the M-Pesa mobile payment product from concept inception in to December The Central Bank of Kenya’s treatment. of M-Pesa. The Kenyan ‘M-Pesa’ mobile telephone banking.