Monday, December 8, 2008

Safaricom and Western Union: From hate to love relationship?

Vodafone announced a partnership today with Western Union to allow international money transfers via mobile phones, as the wireless carrier seeks to tap into the increasing flow of cross-border remittances, the Wall Street Journal reports.

The pilot programme allows residents of Reading in the UK to send money to family members and friends in Kenya, where Vodafone is the 40% owner of Safaricom. If that programme is successful, the companies will expand it to other countries.

The service enables customers to send cross-border remittances from select locations directly to Safaricom mobile subscribers in Kenya generally in minutes. The initiative uses Western Union´s trusted global "hub" for processing cross-border remittances. It builds on the success of M-PESA, a mobile money transfer service in Kenya offered by Vodafone and Safaricom, which has attracted over 4 million customers since its launch in March 2007.

The pilot will take place through a select number of Western Union agents based in Reading. Consumers can send funds to any Safaricom mobile subscriber in Kenya in a matter of minutes. Receivers can use their funds in a variety of ways, including visiting one of 4,000 M-PESA agents in Kenya to withdraw their cash, or forwarding it on to another mobile phone in Kenya.

"The successful take-up of M-PESA in Kenya has clearly demonstrated the demand for easily accessible, secure cash payment services in emerging markets," said Nick Hughes, Vodafone’s Head of International Mobile Payments. "Our partnership with Western Union allows M-PESA subscribers to receive international remittances and builds on the demand we have already seen domestically in Kenya."

"This program aligns a global leader in money-transfer services, the world´s largest mobile operator group, and arguably one of the most impressive success stories in mobile money," said Matt Dill, Senior Vice President, Western Union Digital Ventures. "In offering M-PESA users the opportunity to receive funds from abroad for the first time, these three companies are changing the way money moves around the globe."

Michael Joseph, CEO of Safaricom, said, "This is another great step for M-PESA and will benefit many Kenyans all over the world. International remittances form a significant part of the total income for some Kenyans and the partnership with Western Union will provide Kenyans with an opportunity to receive small values of cash from abroad in a fast, safe and affordable way."

There are many benefits of using mobile phones for micro-transactions in a country like Kenya, where few people have bank accounts and over 10 million people have mobile phones. Furthermore, increased global migration has led to a significant increase in the flow of funds from expatriate migrant workers who send money home. Last year, for example, Kenya received approximately US$ 1.3 billion in international remittances.

7 comments:

pink m said...

This would be so good. The convenience M Pesa has right now, taken to an international level. Better still would be having all Vodacom partners linked through M Pesa. It would take money transfer to another new level, and for sure the love relationship would turn to hate once more because who would need Western Union?

One thing though I wish Safcom would do with M Pesa is make it possible for one to use the phone book when sending cash. That would eliminate the queues and calls about money sent to the wrong people.

Rafiki said...

pink m: Maybe they still need Western Union because it is an international transfer, I don't know. Excellent idea about the phone book, I hope someone at Safcom is reading this.

Apparently, sending up to £100 costs £4.90, and £100 to £200 (the maximum amount) is £6.90.

ujo said...

have u thought of covering Sauti sol's album launch this friday at Nairobi National Museum?

These guyz are the best thing that has happened to Kenya since the birth of Urban Afrofusion- Soul Music.

check it out at http://myspace.com/sautisol

checkout my blog, eugenethomas.wordpress.com

Rafiki said...

ujo: Their music is pretty cool, but why do they look so mean on their MySpace picture? Why don't you cover their album launch on your blog, rather than giving me extra work?

la5226 said...

I wouldn't have to rush to western union before closing time now:-)

Brilliant idea!

Biche said...

Hi Rafiki,

Thanks for sharing this with us. This is really interesting news! I am proud to hear of a positve technological advancement being tried and tested in Africa first.

Africa Oyé!

Biche

Rafiki said...

@ la5226: Welcome to the 24 hour economy!

@ Biche: Glad you read it here first.