With M-PESA now being used by two thirds of the population in Kenya, co-creator Lesley-Ann Vaughan reveals the five reasons why the mobile money service has been able to build such a loyal customer base, including the need for a “fintech mentality”, ensuring a consistent customer experience and having to go beyond tech.
If you’ve ever been to Kenya, there’s a particular brand that stands out from the crowd. It’s called M-PESA, a mobile money service that lets people transfer cash using their phones.
Launched in 2007 by Safaricom, Kenya’s largest mobile-network operator, M-PESA is used by nearly 20 million Kenyans – the equivalent of two-thirds of the adult population.
Despite the launch of other money-transfer schemes, M-PESA remains the dominant leader in Kenya and continues to play a major role in shaping the economic growth of the country.
So what’s the secret behind generating such a huge customer-base and, more importantly, retaining them?
People think the answer is found through an understanding of what makes a reliable mobile money service. But we were constantly asking ourselves how we could make M-PESA a lovable money service experience for our customers
A consistent user experience was important
We made sure that it worked and customers weren’t let down by M-PESA. In the past, it wasn’t like that. There was always a struggle for customers to pay, save and receive money.
Traditional banks and big money transfer firms didn’t care about service. If customers didn’t like what they offered – tough. There wasn’t a better alternative out there.
From the very beginning M-PESA took a different approach. It cared about customers and wanted to create a good service for them that would add value.
This is now an approach taken by new fintech firms today like Monzo and Starling – companies that really value their customers’ experience and design services they want and like to use.
The team behind M-PESA had this fintech mentality more than 10 years ago – at a time when no-one else did – and it helped us design the service.
When customers started using M-PESA they were so impressed that it always worked that they soon became committed users.
We focused on system performance
System performance is vital to delivering an excellent mobile money transfer. We designed a new architecture based on how to overcome the existing challenges that often hindered the delivery of a seamless customer experience.
By changing the architecture we could also address any degradation to the system – so if customers needed help, or if there was a problem during transactions, we could address it immediately from our end.
M-PESA delivered excellent customer service from its launch and users kept on having a positive experience – they felt valued and that instilled loyalty.
Customers had to see value
Our money transfer scheme was also cheaper than anything else on the market. M-PESA is free and very accessible. It’s also easy to use.
Customers simply pay money into the M-PESA mobile wallet by handing cash to one of Safaricom’s agents, many of which are essentially ‘mom and pop’ corner shops selling airtime. The agent credits the money to the M-PESA account.
Users withdraw money by visiting another agent, who checks that you have sufficient funds before debiting the account and paying you the cash. Money can also be sent electronically using a menu on your phone.
By making it so quick and easy to send money, people feel rewarded for using the service, as it frees up their time to focus on other things and to spend their money- instead of having to wait in line to pay a water bill or travel long distances to give cash to loved ones in rural villages
Innovation needed to be continuous
When the M-PESA service took off, we were able to innovate further, create an ecosystem and establish partners with retailers and businesses. M-PESA went viral – its popularity spread through word of mouth and we built a community of supporters that told others about the service.
We continue to push boundaries for payments and to support some great innovation to this day.
Among them is M-Kopa, a leading pay-as-you-go energy provider to off-grid homes in Africa. Its main technology, of using mobile money to provide energy on credit was made possible because the company had the M-PESA rail.
M-PESA went beyond tech
So much of the success of M-PESA goes beyond just tech. The user experience and pricing is important, but the service design and branding was also key to adoption.
Michael Joseph, Vodafone Group’s director of mobile money and the man who led the strategic growth and development of M-PESA, was widely popular among the population and became a symbol of trust for consumers.
His vision, the people building the product, the way the service was run, the technology, the selling – it took a lot to get this working and off the ground. Today M-PESA is used by millions and we’ve transformed so many lives.
Users remain loyal and love M-PESA because we created something that matters to them, something that is reliable and easy to use, and ultimately adds true value for customers.
Lesley-Ann Vaughan is one of the creators of M-PESA, the award-winning money transfer service for Safaricom (Vodafone Kenya), and an expert on mobile money in Africa. As one of the five Sagentia consultants who worked on the original M-PESA pilot, alongside founders Susie Lonie and Nick Hughes, she helped to develop the product and then take it to market.
She has since led the product management team at a startup venture dedicated to extending and developing mobile financial services into emerging markets.