M-Pesa is the dominant cashless and mobile money transfer service in Kenya. As of 2020, the Safaricom product (Kenya's biggest Telco) controls a significant chunk of the local market for telecommunications, and monetary assets. According to data from Kenya's communication authority, by the end of 2019, M-Pesa has the following results.

As of the end of 2019, there were 28.9 million active subscriptions in the market. Moreover, Safaricom's M-Pesa accounts for most subscriptions (98.8%) of 28.6 million active users in Kenya.

With nearly $124 billion in mobile money transfers in both the B2C and B2B arena alone, you can see the value of this service to Kenyan consumers. It is also why other telecommunications players are trying to replicate its success both in Africa and abroad.

So the question inevitably becomes, is M-Pesa an odd duck, or can it be replicated elsewhere with the same success.

This concept has been tried both in Africa and abroad to varied success in the below countries. M-Pesa is currently in 7 countries, which include:

• Kenya
• Tanzania.
• Mozambique
• The Democratic Republic of Congo
• Egypt
• Ghana
• Lesotho
  

• M-Pesa in Tanzania - Vodacom M-Pesa has 7m customers and 41% market share. 

• Egypt M-Pesa – The service has 1.6m customers, which equates to a 50% mobile money market share.
• Ghana M-Pesa  – The service has 1m customers, which equates to 10% mobile money market share.
• DRC M-Pesa – In the DRC, the company has 3m customers, equivalent to a 40% market share.
• Mozambique M-Pesa -  In Mozambique, the service has 4m customers, which equates to a 90% market share.

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The Future of M-Pesa in the continent

More countries will use the Mpesa service under an agreement between the MTN Group and the Vodafone Group that allows subscribers to exchange currencies.

To be precise, this agreement will allow people in Uganda, Rwanda, and Zambia to access M-Pesa's services.

In South Africa, Mpesa began offering Mpesa services in 2010 in partnership with Nedbank.

However,  problematic attempts during registration of  new customers, has meant that Vodafone's efforts have yet to materialize. As a result, Vodafone withdrew its Mpesa service in South Africa in 2016.

M-Pesa in Europe and Elsewhere

The service has been offered worldwide with mixed results, some European countries took up the turn, but it did not last long because of several factors. 

Now let's take a look at some countries where Mpesa cannot work or work. Vodafone's attempt to launch the MPESA service in some countries has been futile but is still booming in others.

In May 2015, the extension of the service to Albania was suspended shortly after July 2017.

However, although Mpesa launched in India on April 18, 2013, it has been closed this year since July 15, 2019, due to regulatory issues and rapid growth.

In March 2014, Mpesa launched a mobile money service in Romania but closed it in 2017 after not gaining any traction and losing 2.5 million euros in the process. This service can be extended to other Eastern European countries.

Vodafone collaborated with Roshan to launch the M-Pesa service in Afghanistan to some success. We could consider this is the sole success story for MPesa outside of Africa. Mpesa's service in Afghanistan, dubbed M-Paisa, is still the only mobile money network in the country since its launch in 2007; however, it has a lot of competition from the Hawal network transfer service.

Why is M-Pesa Penetrating into other countries??

The introduction and growth of Mpesa into other countries may be affected by the following factors.

Trust

The prevailing trust factor among the local population may be a critical barrier to entry. The target audience is mainly unbanked, and this population deals primarily in cash. Convincing them to switch to mobile money may be a unique challenge for the service.

Alternative to mobile money

For example, in countries like Afghanistan, where a decades old alternative and informal Hawala Network has existed for money transfers. The Hawala Network has an element of trust that the mobile money service may find hard to penetrate. The interpersonal service may face adoption challenges for this reason.

Investments in agents

When Safaricom started the service in 2007, they invested heavily in an agent network to make it work successfully. Luckily as a dominant telco, they already had a network of agents who sold airtime, and tapping into this network was vital in overcoming this barrier to entry.

Local laws 

For nine years in Kenya, the law allowed Safaricom to limit the M-Pesa services to its agents. This means an agent was not authorized to offer services from competing telcos. So while the company dominated, it was nearly impossible for the other entrants to compete. It wasn't until 2016 that Safaricom was ordered by the Kenyan competition authorities to open its network of M-Pesa agents to other telecom companies offering mobile money services.

Conclusion

The future of the M-Pesa service and its growth prospects across Africa and in fact, the world is very promising, but the company has many challenges to overcome if this future is to be achieved.