THE days when South Africans will pay for a taxi ride by simply transferring the fare to the driver’s cellphone are not far away, the head of SA’s largest cellphone company said yesterday.
And if Kenya’s experience with its own M-Pesa service is anything to go by, Mr Uys and Nedbank CEO Mike Brown believe they have not only struck a rich vein, but also opened a new frontier in the battle for the unbanked.
“Pesa” is the Swahili word for cash; the “M” is for mobile.
Pioneered by Safaricom with part-owner Vodafone, M-Pesa is an innovative money transfer and payment service that was initially targeted at Kenya’s unbanked population — millions of whom live in areas where building a bank branch does not make business sense.
But it has since been embraced by almost everyone with a cellphone, and Kenyans from all walks of life — from fishermen and vegetable vendors to sangomas — now use M-Pesa to transfer money, buy airtime and pay bills.
And barely three years after launching M-Pesa in Kenya, Safaricom has registered 12-million users who have made their cellphone a virtual moving bank.
And in that same period, about R50bn has been transferred to recipients using a cellphone. It is this spectacular success that Nedbank and Vodacom want to replicate with their version of M-Pesa.
Managing executive at Nedbank Retail, Saks Ntombela, says it is the first such money transfer service using a cellphone to hit the local market. Vodacom and Nedbank are already thinking of adding more services such as paying bills, buying goods and employer payments to workers via their cellphones.
Mr Ntombela says that up to 50000 partners would be registered as M-Pesa outlets, and these would range from the major retailers to spaza shops and community centres. Money would be loaded onto a Vodacom cellphone and can be sent to any cellphone number in SA. The receiver redeems the cash at any M-Pesa outlet or Nedbank ATM. Mr Brown says he hopes to persuade rivals to configure their ATMs so they can also be used to withdraw money sent via M-Pesa.
Vodacom and Nedbank predict that within three years, they will have registered up to 10-million customers using the service.
Mr Brown says the target is achievable, considering that about 13-million people were unbanked out of an adult population of 33- million. Nedbank, which is still trying to shake off the perception it is an elitist bank, says it wants to take the leadership role in spreading banking to the unbanked.
Mr Brown was unashamed in his boast yesterday, describing the launch as an event that will shake the market and leave competitors scratching for solutions to counter the threat. “We want to ensure that banking products are easily accessible,” he says.
Mr Uys says he expects increased usage of the network, as more people sign-up for M-Pesa, which will increase revenue through SMS traffic.
“We are planning nothing short of a mobile money revolution in the country,” he says .
“It is a simple idea but also totally revolutionary, particularly in the way we think about mobile technology and how it will affect the lives of people. With this service, you can now transfer money to anyone with a cellphone, whether they are a Nedbank customer or not,” he says. Nedbank, whose customer base has just breached the 5-million mark, says M-Pesa will ease money transfer woes for South Africans . But most importantly, Mr Brown says, it creates a new pool of potential customers who could eventually qualify for home, personal and vehicle loans — the bread and butter of any bank.
Mr Brown says with one in eight banking customers already doing business with Nedbank, M-Pesa will enable the lender to increase these numbers to within breathing space of First National Bank with about 6,8-million customers, Standard Bank , which has 8,6-million customers and Absa , which claims more than 11-million customers.