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Library » Three Keys to M-PESA's Success: Branding, Channel Management and Pricing

Three Keys to M-PESA's Success: Branding, Channel Management and Pricing
2010, Mas, I. & Ng'weno, A.
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How did M-PESA build trust and overcome adverse network effects?

This paper explores how Safaricom, the mobile operator that commercializes M-PESA, managed to create enough traction with customers and retail stores, building trust and overcoming the adverse network effects that afflict new payments systems.

M-Pesa, a mobile-phone based electronic payments system, has been adopted by 8.5 million Kenyans in less than three years. User surveys indicate that it is a highly-valued service, and Safaricom continues to expand its range of applications. In the initial stages, M-PESA faced challenges such as building trust, building a network and attracting customers and stores simultaneously. It overcame these challenges by creating:

Awareness and building trust through branding;
Consistent user experience while building an extensive channel of retail agents offering cash in/cash out services;
Customer pricing and agent commission structure that focuses on key drivers of customer willingness to pay and incentive-based early adoption.

The experience of M-PESA demonstrates how powerful a payment network that offers convenience at an affordable cost can be once it achieves a critical mass.

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30 Aug 2010
M-PESA success story

I cannot agree less with the reasons identified for M-PESA's success. Their story is a great inspiration for other African countries wishing to tread in the very volatile mobile payment and mobile commerce market. The extensive use of retail agents and well thought out commission structure is a great model to emulate any day. Thanks M-PESA for giving Africa something to cheer about. Keep the flag flying.

Leycot Benson m10 africa global services limited Nigeria

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Publisher(s):
Bill & Melinda Gates Foundation