Ever used Venmo, Apple Pay, Cash App, PayPal or Crypto? 

By 2021, digital currency seamlessly integrated. Curious about its origins shaping deep-rooted connection in our lives? What steps and precursors did we need to take to reach where we are today? In large part, one answer to these questions is M-Pesa.

Around 2000, developed nations’ banks embraced digital expansion, exploring financial technology and new financial mediums for global transformation. Kenya, on the other hand, encountered a reluctant central bank’s response to the new ways of the world. A largely unbanked population found an opportunity to respond creatively due to this.

Enter: Telecommunications giant Vodafone and Safaricom, Kenya’s leading mobile network operator.

Thanks to a grant from the UK’s Dept. of International Development, the Pilot launched in 2006, primarily as a means for micro-lending.

However, users quickly discovered a feature that allowed for peer-to-peer transactions. They had identified one of Kenya’s biggest needs almost completely by accident. Kenyans required quicker, cheaper money transfers than costly bank options due to poverty, prompting a demand for improved solutions.

The demand for this service reared its head in the first year of M-Pesa’s launch. Safaricom set a goal for 350,000 users on their micro-finance and loaning program, which grew to the tune of over 1.2 million users. Most of which were largely utilizing the user-to-user transfer function.

M-Pesa identified service demand, aiming to offer accessible ATM features due to its expanding user community’s rapid growth. Without the time or resources to open branches at such a large scale, Safaricom utilized what already exists in Kenya; small mom-and-pop stores and even smaller specialized commerce stands. These micro-businesses were weaponized as hosts for M-Pesa Kiosks across Kenya and allowed for its meteoric rise to a significant market share of Eastern Africa’s economy. 

M-Pesa has achieved an almost unmatched market penetration in any industry worldwide. Over 96% of Kenyan households are utilizing the service. Today, Sub-Saharan Africa boasts over 150 million active mobile money users thanks to M-Pesa and other similar services, accounting for nearly half of the world’s active monthly mobile money users.