Most important technological innovation in the last twenty years

According to me, the most important innovation in the last twenty years is M-PESA,
which falls under financial innovation. M-PESA is a virtual mobile banking system
(launched in 2007 and operated by Safaricom, which is the largest mobile operator in
Kenya) that enable users in Kenya and many other African countries to transfer or
receive money on a virtual account on their mobile phones (Kagan, 2020). It drives
financial inclusion by providing an alternative way for people, including the unbanked,
underbanked and even people in the most remote areas, to access financial services.
Customers need not to have bank accounts but instead can hold money in the form of
tokens stored on their mobile phones which they can deposit or withdraw simply by
presenting their national identification cards at any M-PESA outlet distributed
throughout the country (Jack & Suri, 2011).

Why it (M-PESA) was the most important technology innovation

This is because M-PESA has been a driver of financial inclusion and has
revolutionized the way people send, save and receive money even to the most rural
areas in my country, Kenya. Financial inclusion is an initiative to include individual
without access to traditional banking services, plus who cannot afford to meet its
requirements. With M-PESA, all you need is an ID to register, and you can send any
amount of money to anyone with a sim card. 

You can also send money to your bank, and easily transfer from bank to the M-PESA
account for easy withdrawal since M-PESA agents are located throughout the country,
unlike banks that are hard to access especially at the rural.

Again, many people are able to access smartphones and therefore it is easy to send
money to individuals so easily.

Through it, the standard of living has greatly improved as people can easily send
money to their parents back at rural homes, fundraise for an emergency, pay their
creditors, and so on.

Demand for this technology (M-PESA) innovation

Over 80% of Kenyans own phones (Geopoll, 2021). The fact that phones are affordable
to majority of the people and that the procedure of registration for M-PESA is simple,
the demand for M-PESA services is high, making M-PESA the primary way of sending
and receiving money.

How this technology innovation (M-PESA) has been supplied to the consumers
Registration can be done at any M-PESA agent shop, during street activation, and
even at the Safaricom shops.

M-PESA being a phone-based, money transfer service, all that a customer needs is a
phone and a national identification card when registering a sim card for M-PESA
services or when making transactions such as deposits or withdrawals at the
registered M-PESA outlets.

Money can be received from any part of the country, from any bank, and even
internationally.

How the law of demand has affected this technology innovation

Demand may be defined as the willingness and ability to purchase a given quantity of
good or service at a given point over time (Krylovskiy, 2020).

The demand of M-PESA mobile money is crucial determinant of the effectiveness of

monetary policy. According to studies, there is a positive relationship between M-
PESA and money demand, that is to say, an increase in the M-PESA mobile money
leads to a corresponding increase in the level of demand for money for the Kenyan
economy (Kasekende & Nikolaidou, 2018).

If there’s equilibrium in supply and demand for the technology innovation (M-
PESA)

No, there was not.

What can be done:

Key economic players and regulators should regulate the demand for M-PESA money
as money demand and supply play a vital role in the regulation of the economy. This
can be achieved by having effective monetary policies that in turn manage other
factors of economy.
References

Kagan, J. (2020, December 14). M-Pesa. Investopedia.Com.

https://www.investopedia.com/terms/m/mpesa.asp

Kasekende, E., & Nikolaidou, E. (2018). Mobile money and money demand in Kenya.

School of Economics, University of Cape Town.

Jack, W., and Suri, T. (2011). “Mobile Money: The Economics of M-Pesa,” National

Bureau of Economic Research. Working Paper No. 16721.

Krylovskiy, N. (2020, January 28). Definition of demand. Economicsonline.Co.Uk.

https://www.economicsonline.co.uk/Definitions/Demand.html

Geopoll. (2021, January 13). Mobile penetration and growth in Kenya. Geopoll.Com.

https://www.geopoll.com/blog/mobile-penetration-kenya/