Title Global E-marketing Concerns

Description: Please do research on M-Pesa and write a four page report APA style and submit.

M-PESA is a fast, secure and convenient mobile based monetary transfer service housed

and developed under the Vodafone Company via the Safaricom brand. This innovative service

offers value to its customers in a truly innovative manner. M-PESA is an electronic payment and

store of value system that is accessible through mobile phones. The use of the service only

requires users to register at an authorized M-PESA outlet after which they are assigned a unique

account number linked to their phone number. Once this short, cost free and hassle free process

is complete, users are able deposit and withdraw cash to/from their accounts by exchanging cash

for electronic value at a network of retail stores. These stores are paid a fee by Safaricom each

time they exchange these two forms of liquidity on behalf of customers. Once customers have

money in their accounts, they can use their phones to transfer funds to other M-PESA users and

even to non-registered users, pay bills, and purchase mobile airtime credit. All transactions are

authorized and recorded in real time using secure SMS, and are capped at around $800 USD.

M-PESA was not only designed to be convenient but also ultra cost-effective as well.

Customers pay a flat fee of around 35 USD for person-to-person transfers and bill payments,

30 USD for withdrawals and 1.1 USD for balance inquiries. Individual customer accounts are

maintained in a server that is owned and managed by Vodafone, but Safaricom deposits the full

value of its customers balances on the system in pooled accounts in two regulated banks. Thus,

Safaricom issues and manages the M-PESA accounts, but the value in the accounts is fully

backed by highly liquid deposits at commercial banks. Customers are not paid interest on the
balance in their M-PESA accounts. Instead, the foregone interest is paid into a not-for-profit trust

fund controlled by Safaricom. M-PESA also serves as a retail payment platform thanks to its

extensive reach into large segments of the population. These retail stores are also being used as

M-PESA cash-in/cash-out outlets which reduces deployment costs and provides greater

convenience and lower cost of access to users.

Payment through the use of mobile phones revolutionized how business is conducted

among the small-scale business holders. Micro-businesses have embraced the use of mobile

payment technology in their operations. They view this mode of payment as an easier form of

cash delivery to their suppliers and business partners, a system which is relatively affordable,

personal and can be used anywhere and at any time (Anurag, Tyagi and Raddi, 2009). There is

appeal and utility of mobile banking and mobile payment services as there are probably more

people with mobile handsets than with bank accounts (Porteous, 2006).

M-PESA has allowed micro-business operators much convenience, they are able to

transact payments directly with their customers and suppliers through a mobile phone in the palm

of their hands without necessarily going through a bank (Anuradi, Tyagi and Raddi, 2009) and

without having to leave their business premises. This is beneficial because all it requires is for

one to have a mobile phone and basic literacy to operate the phone. Other benefits derive from

the fact that the system does not rely on any physical infrastructure such as phone wires and is

accessible to a large segment of the population (Elder and Rashid, 2009); and from the fast speed

in transacting money transfers. These features bring considerable convenience to business

operations. The mobile payment providers agents are well distributed and easily accessible to

the micro-business owners for support of their services. It is also easy for the micro business

operators to control their mobile phone accounts as they can access their accounts any time.
 As with any technologically based service, M-PESA has implemented security measures

to ensure their users funds are kept safe from the clutches of hackers and other deviant figures.

When a user registers to be an M-PESA customer, they get a Secret Word which they can use to

reset their PIN when they forget their PIN. Customers also gets a 4 letter numerical unique PIN.

They can change the PIN from the M-PESA Tool Kit for a small service charge. M-PESA then

allows you to select the name of the person from the contact list, but only if you have saved the

contact on your Sim Card. If a customer withdraws money from an agent, they receive a

confirmation message that they have withdrawn a certain amount from said agent. The agent

won't release any money until that confirmation message is received and presented; the agent

also does receive a similar message. To deposit, a customer has to hand over money to the agent

first. This is a pre-cautious step to prevent an agent depositing money into a customer's account

then the customer fails to hand over the cash. Lastly, if a customer sends money to a wrong

number, an agent can initiate a process of back rolling the transaction, though, this only becomes

useful if the customer on the receiving end had not withdrawn the money yet.

In conclusion, the M-PESA monetary transfer service is not only innovative but revolutionary as

well. Demographics that were previously limited in accessing formal financial services have

benefited from the financial products offered through M-Pesa. In particular, its short-term Pay

Bill Account service allows users to fundraise for a variety of purposes, including expenses

relating to medical needs, education, and disaster relief.

While M-Pesa and other services like it do expand opportunity and financial inclusion, mobile

transfers are not a complete answer to fully participating in formal financial systems. M-Pesa

only allows for relatively small amounts of money to be stored and transferred via mobile phones

and cant substitute for opening a bank account or getting a loan for a small business.
By enabling users to transfer money to each other and make payments directly to businesses and

service providers, mobile money platforms cut down on corruption by reducing the need to

operate in a cash-only economy. As a result, M-Pesas empowers individuals and supports

entrepreneurial creativity in a less constrained financial marketplace.

 REFERENCE

About Us. (n.d.). Retrieved February 08, 2016, from

https://www.mpesa.in/portal/customer/AboutMpesa.jsp

Rundy, D. (n.d.). Retrieved February 08, 2016, from

http://www.forbes.com/sites/danielrunde/2015/08/12/M-Pesa-and-the-rise-of-the-global-mobile-

money-market/#2a3d0e2423f5

Mas, I., & Radcliffe, D. (2011). Mobile Payments Go Viral: M-PESA in Kenya. The Capco

Institute Journal of Financial Transformation. Retrieved February 7, 2016.

Mbogo, M. (2010). The Impact of Mobile Payments on the Success and Growth of Micro-

Business: The Case of M-Pesa in Kenya. Journal of Language, Technology & Entrepreneurship

in Africa, 2(1).