Marketing Channels

Take home essay 2

2.    M-Pesa is a term not normally known by most people. However, the idea behind the name is fairly simple, as defined by Vodafone, a leader in the industry, M-Pesa is, “a fast, secure and convenient way to transact on mobile [devices]” (Vodafone.com). this type of service has become very popular in today’s modern age and other companies have hopped on the bandwagon as well such as Venmo. A large factor for its success has been its simplicity and easy adaptability. The steps for setting up and using this feature are as follows, register, load money on, and send money/take money out. As pointed out by ourmobileworld.org this sort of convenience means, “you can also pay all sorts of bills, over 600, by mpesa. Through a very similar process to sending money to friends. You can buy a flight, pay your water bill and much more” (Ourmobileworld.org). I know that I myself use mobile payments and transferring all the time, in fact I requested twenty dollars from my friend and he was able to pay me from which I could then deposit it directly into my bank account.

From what I was able to gather through my research I found there was 2 or 3 main factors behind this technology gaining the popularity and traction it did. The first factor was the area the technology was first implemented, Kenya and Tanzania. Because not a lot of citizens their own bank accounts, it made it difficult for the transferring of money effectively and safely. It finally made it so “the unbanked now have a way to save money, to send money and to receive money” (Ourmobileworld.org). Another large reason for its success is its simplicity, not only in the utilization sense, but also the software it runs on. Because of its basic features and programming it is able to run on almost any cell phone on the planet, which is hugely important in underdeveloped countries such as Kenya and Tanzania. Also because of the low amount of sophisticated technology, most residents wouldn’t know how to use the app if it was confusing so having a simple user interface was a great way to allow for quick adoption. Simplicity means nothing however if it isn’t safe, and thankfully it is. People who use it are confident in system and it has yet to suffer and major problems due to hackers and thieves. However virtually safety is just as important as the actual physical safety the app provides for employers. For people who use this app in order to pay their employees it provides them with a unique safety incentive. Large-scale jobs such as construction call for a massive amount of workers and without a banking system; they were forced to pay them in cash. Walking around with large sums of money in third world nations proves to be a dangerous endeavor and this sort of technology basically eliminate that concern.

Even beyond the individual benefits to the people who use it, M-Pesa holds socio-economic value as well. The app allows for less physical money in rotation which doesn’t seem like a big deal, but as pointed out by Mohit Agrawal of the Telecom Circle, “M-PESA brought in the transparency in the money transactions by reducing the cash economy and digitizing the transactions” (Telecomcircle.com). Mobile transfers has turned into a sort of equivalency of debit and credit cards and allows auditors to keep track of the transfers. It has effectively increased the visibility of transfers and has allowed for transactions to “move from informal channels to formal channels” (telecomcircle.com). It also has the power to make it so that everyone has the ability to be financially included in the infrastructure of the country. Because the country is underdeveloped the amount of banks and ATM’s mean that even if you do have a bank account, It’s difficult to access your money consistently and easily. This system allows all citizens to be their own personal bank account without the conventional banking system. Overall M-Pesa has been a huge success all around the world expecially in third world countries.