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Mobile money: How Kenya finally beat the first world

By XN Iraki | September 29th 2021

This photo captures a financial revolution. It more than gives us cashless payment options to contain the spread of Covid-19. Being Kenyans, we are so used to technology that we often don't take time to reflect on or marvel at innovations such as mobile money.

Think about it by looking at the world's cashless payment solutions before M-Pesa. Visa card was started in 1958, American Express the same year and MasterCard in 1966 - these are credit and debit cards.

M-Pesa was started in 2007, almost five decades later. The card companies were started far away in advanced economies. M-Pesa is home-grown and yet it has caught up with the global giants. See the way they have put them at the same level in the photo. This mobile money service perhaps never thought about it that way. 

Why does this photo reflect a revolution? Simple – just as we skipped house phone, so shall we skip debit and credit cards. Some banks do not get it and are busy marketing credit cards. They probably think that with Covid-19 we shall increase our appetite for credit. 

Yet many Kenyans don’t even want ATM cards. I have overheard someone saying he shall not pick up his ATM card no matter how many times the bank calls him. 

If you can transfer money from your bank account to M-Pesa, do you really need a card? In fact, it is not just cards that will leave the market, ATM machines too. One innovative bank has started reducing the number of ATMs. Do not blame Covid-19, the shift to electronic money was on long before the pandemic.

The card revolution was based on advanced technology, but the M-Pesa revolution is based on simplicity – use of phones. Ever noted how M-Pesa agents use the simplest phone, a mulika mwizi?

The dream of cashless society has eluded us for so long, but now looks like a reality. With your phone, you can pay for anything - from land to dowry. For once, we can boast of being ahead of the West or East. But we don’t know how to blow our trumpet.

Can we leverage on our home-grown innovation to remain ahead? Can we innovate in other sectors beyond financial services? That sector has demonstrated that creative destruction, a legacy of Joseph Schumpeter (the late Austrian economist) is real. 

M-Pesa is a cause of optimism. Africa, despite all the bad publicity, can be a hopeful continent. Will you join me in publicizing that optimism?  

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