How the M-pesa system works

M-pesa M-pesa these are the words that dazzles everywhere throughout
the Kenyan landscape thus echoing its success as a mobile banking that rose
from a mere prototype application to the world biggest mobile money
transfer. M-pesa was first launched in Kenya by Safaricom in 2007
undergoing extensive development by companies such as IBM Sagentia.
After its launch and success in Kenya M-pesa rapidly expanded in other
African countries such as Tanzania, South Africa and outside the continent
.Before I dig deep into how the system works and the invaluable services it
offers to the common mwananchi let first begin my understanding what is
mobile banking. Mobile banking is a system that allows customer of a
financial institution to conduct a number of financial transaction through a
mobile phone.
To begin with the M-pesa mobile money transfer is a network that has
senders and recipients i.e. users, agents and technical team that network
from behind the scene. First you have to register to join M-pesa at any Mpesa agent for free. This is quite an easy task as M-pesa has an army of
agents dotted all over the country numbering about 80000. Once registration
is done the M-pesa system sends you an update menu on your phone thus
giving you the green light. The second phase is you can now load money into
your newly created M-pesa account by handing over cash to the M-pesa
agent and he/she loads it to your phone. Third phase you can send money by
using your phones menu to send money to a recipient phone number. To
achieve this transaction Safaricom uses a commodity known as a ‘e-float’
measured in the same units as money. You can also pay bills using the Mpesa phone menu. The M-pesa money transfer does not pay interest on
deposits like a traditional bank but rather accepts deposit and withdrawal
only. Safaricom charges no depositing funds but a sliding tariff is levied on
withdrawals.
Safaricom uses the SMS technology and an interface to facilitate the
transaction of M-pesa services. Since M-pesa uses SMS technology it is
dependent on cell towers for distribution of data, Safaricom utilizes its vast
network of towers in the country to facilitate transaction and ensure M-pesa
runs effectively and becomes a success story
In conclusion as the wise men say innovation is not the results of chance, it’s
the results of action and action is not a thing to wait for. It’s a thing to do.
The situation in Africa necessitated the need for mobile money transfer thus

Communications Commission of Kenya. (2012).x . 43: 84–90. "Sagentia" 4. "CCK releases 2nd quarter ICT sector statistics for 2011/2012". Intentional Policy Influence and Private Sector Engagement. 5. Mas and Morawczynski (2009): “Designing Mobile Money Services: Lessons fr om M‐PESA.M-pesa was conceived which has forever changed the lives of many people and put Kenya as the top contender for mobile banking industry. S.wikipedia. http://en. changing the Financial Landscape of Africa: An Unusual Story of Evidenceinformed Innovation. 3.org/wiki/M-Pesa 2.1111/j. IDS Bulletin.00367.” Innovations. Bachelor.1759-5436.2012. doi: 10. 17 Apr 2012. REFERENCES 1.