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Sunday, July 10, 2011

Safaricom’s mobile money services rakes in N1.34trn


...As MTN prepares to launch mobile money
Nigeria’s telecom operator, MTN prepares to launch mobile money services in August 2011 in a bid to re-enact the success story of Safaricom, a telecom company based in Kenya. Safaricom runs the biggest money service in Kenya called “M-Pesa,” following its transaction of a Sh727.8 billion (N1.34 trillion) last year.
BusinessDay learnt that when MTN mobile money service is launched, it is expected to cover 40 million subscribers, mostly the high number of unbanked Nigerians that it will bring into the scheme, which will make it the biggest in Africa. The launch will coincide with the take-off date for the national mobile money scheme being superintended by the Central Bank of Nigeria.
Less than 20 percent (28 million) of Nigeria’s 140 million people currently operate bank accounts. The country’s 24 commercial banks reportedly have a network of less than 4,000 branches. Meanwhile, there are over 90 million active phone lines in the country, with over 95 percent of them being mobile lines.
The M-PESA service which the MTN mobile money will be fashioned after enables users to send and receive money through their mobile phones. The Central Bank of Kenya report shows that the M-Pesa service in Kenya  saw over 305 million transactions carried out in the year, according to 2010 annual bank supervision report.
The report notes that  “M-Pesa was still the most widely used method of mobile money transfer as evidenced by the 305.7 million transactions effected and valued at Sh727.8 billion in the year.
This means that on average, the service moved Sh2 billion daily. “This is huge but it’s possible…people are using a lot of mobile money now,” said Telkom Kenya’s communication manager Angela Mumo. The figure is likely to rise even further this year, according to Safaricom’s chief executive officer, Bob Collymore. “The numbers are certainly increasing,” said Collymore on phone yesterday. “Everybody is using M-Pesa.”
Person-to-Person transactions for March 2011 stood at Sh47 billion,(N80.8 billion) according to figures released during the investor briefing in March.
Since being launched in March 2007, M-Pesa’s popularity has been growing from strength to strength. For instance, the number of users grew from 6.1 million in 2009 to 9.4 million in 2010 and 13.8 million users as at March 2011. On revenue side, Safaricom made some Sh11.78 billion(N20.78 billion) from M-Pesa last year up from Sh7.56 billion( the previous year, a 56 per cent growth.
According to Safaricom’s annual report for the year ended 31 March 2011, Cumulative value of transactions from inception is Sh828 billion. M-Pesa competes with services such as Airtel Money, Orange Money and Yu-cash. “In only four years of existence of mobile phone money transfer services, four mobile operators have enrolled over 15 million customers,” the CBK report says.
According to Mumo, Orange Money transacted over Sh50 million on the first month of launch late last year but the figure could now be over half a billion. “Orange Money allows bigger transactions and that is why we want to partner with Saccos,” Mumo said.
The popularity of M-Pesa has seen the service attract international recognition. The service won the Mobile Money for the Unbanked Award at this year’s Global Mobile Awards 2011 in Barcelona, Spain. The service is also being tried in other countries. In Tanzania, where the product was launched by Vodacom, M-Pesa has 1,6m active and 7 million registered users.
The service has however failed to pick in South Africa where it was launched in August last year in partnership with Vodacom. Last month, Vodacom disclosed that it has only managed to register about 100, 000 M-Pesa users in SA so far. Vodacom said M-Pesa has fallen short of its expectations for the product. When it unveiled the product, Vodacom said it expected to sign up 10 million customers within three years. source

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