M-Pesa Mobile Technology

Normally when one thinks of technology they think of the west...well, actually Kenya is leading the way with innovative mobile phone technology that has changed the lives of millions of people and businesses. Mobile money transfer allows those without a bank account to transfer funds as quickly and easily as sending a text message. The most successful of these systems, and the first to operate on a large scale, is M-Pesa, a joint venture between mobile phone giant Vodafone and Kenya's Safaricom. The M stands for mobile, and Pesa is Swahili for money. Over 50% of the adult population use the service to send money to far-flung relatives, to pay for shopping, utility bills, or even a night on the tiles and taxi ride home.

To use the service, customers first register with Safaricom at an M-Pesa outlet, usually a shop, chemist or petrol station. They can then load money onto their phone. The money is sent onto a third party by text message. The recipient takes the phone to their nearest vendor, where they can pick up the cash. For business, the technology has revolutionised cash flow and it has also increased security, as people no longer worry about being mugged while carrying cash.

Nick Hughes and Susie Lonie are behind M-Pesa and it has been so successful they recently picked up an Economist Innovation award. Nick Hughes says, "What it's done is increased the ease at which money can move around, not just individual consumers but small and medium-sized enterprises as well." M-Pesa has also been launched in Tanzania, Afghanistan and South Africa, with trials underway in India.

So, change is happening! Now mobile payment online is fairly well-established, but what has really pushed the technology mainstream is the success of smart phones and these types of payments will be more social payments; sharing the cost of a meal or paying someone a small amount of money you might owe them by just bumping your iPhones together. It also provides the means to allow people to buy virtual money to use in games on social networking sites like Facebook and mobile companies are looking at ways to capitalise on how easy it is to use a mobile phone as a payment mechanism.

A contactless payment technology is also changing the way we pay for goods in shops. In Japan and South Korea it's been in use for several years, having developed from smart card technology. Verizon Wireless, AT&T, and T-Mobile plan to roll out a mobile payment system called Isis by 2012, and Google's Eric Schmidt says his company's new phone will include an NFC chip. Mobile banking company Monitise is working on a pilot. In the UK, Barclaycard, which already offers contactless payment by credit card are in partnership with Orange to do the same for phones. Overall, it seems the mobile phone becoming ever-more central to our finances and signifies that the mobile wallet is here to stay.

Photo Credit: kiwanja