‘M-Pesa is building a cashless society’

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Rethabile Pitso

VODACOM Lesotho has attracted over 600 000 subscribers to its M-Pesa service — an innovation the telecommunications giant launched in July 2013 through which subscribers can send and receive money, buy airtime and pay utility bills. Palesa Mphunyetsane is the Executive Head of M-Pesa and in this wide-ranging interview, tells Lesotho Times (LT) reporter, Rethabile Pitso, how the facility has changed the lives of Basotho for the better.

LT: What, in a nutshell, is M-Pesa?

Mphunyetsane: M-Pesa is a service that allows registered customers to perform financial transactions safely, easily, affordably and conveniently through a mobile device. M-Pesa was first introduced by Kenya’s leading mobile money network operator, Safaricom, which is part of the Vodafone Group.  The word M-Pesa was derived from Swahili, where ‘m’ refers to ‘mobile’ and ‘pesa’ means ‘money’. M-Pesa has been adopted and is currently utilised in all Vodafone and Vodacom’s operations across the globe. As part of the global brand, Vodacom Lesotho is no exception and hence has also adopted the name M-Pesa. Given this wide usage, M-Pesa has become a global brand and when you travel across Africa or Europe, you shall find that people are very familiar with the name and service.

LT: Where does the mobile money concept come from?

Mphunyetsane: I read in one article that the concept of mobile money was derived from the practice of people transferring airtime to their loved ones in the rural areas of Botswana and those loved ones would  in turn,  sell the airtime in exchange for cash to buy groceries.  M-Pesa was then established to use mobile phones to send money to one’s home through a formalised financial structure that is regulated by Central Banks in order to safeguard peoples’ monies within the system. M-Pesa has evolved from a service that allows people to only send money home, to a multipurpose platform whereby customers are able to pay bills, buy airtime, pay school fees and for other goods and services. Essentially, the concept of mobile money became a proposed solution to the problem that there are large sectors of society, particularly in developing countries, which are marginalised and do not have the required documents to open a bank account nor the ability to afford the associated costs, yet own a mobile phone.

LT: What are the benefits of using M-Pesa in comparison to other financial institutions?

Mphunyetsane: M-Pesa allows people to access money in a simple, affordable and secure environment through one’s own mobile phone. The transactions can be carried out in one’s comfort zone, be it at home or office and not standing in long, draining queues. We wanted to provide better services to people who usually travel long distances to access financial services such as insurance, as well as paying for a wide range of other services. M-Pesa allows you to conveniently pay bills such as electricity, insurance premiums, water, and of late, DStv (Digital Satellite Television). We also wanted to ensure services can be accessed with minimal costs, allowing for greater inclusion.  Traveling costs to access services are also eliminated through the use of M-Pesa. Additionally, M-Pesa offers free cash-in, no monthly fees, and no minimum balance is imposed on the M-Pesa account.

 LT:   What is Vodacom’s vision with the M-Pesa service?

Mphunyetsane: Vodacom has a much bigger vision than purely providing Basotho with telecommunication services; we would like to transform Basotho’s lives by providing them with solutions that matter most to them. M-Pesa is therefore, seen as a way that many Basotho will gain access to services they would otherwise not have at all.  With M-Pesa, we are working towards building a cashless society, where carrying money around would no longer be a necessity.

We have partnered with government institutions to disburse social grants through M-Pesa at low cost. We also partnered with international organisations within the health sector to also facilitate funds through M-Pesa that are disbursed to rural communities of Lesotho.  At the moment, we are consulting with employers who pay their workers with cash, to utilise our service to minimise the risk of carrying money. For example, we are encouraging textile industry factory workers to receive their salaries through M-Pesa, as this will save them transport money and increase the amounts they directly take home. We also have a “merchant” option on the M-Pesa menu which enables one to pay for groceries in retail shops, food in restaurants as well as services at hair salons and many more. These days when I go to gym, I’m able to pay my membership fee using my M-Pesa account.

LT: How has M-Pesa worked towards accommodating the needs of marginalised groups, including the unbanked population?

Mphunyetsane: We work through our agents who are based in all the 10 districts of Lesotho. All our 1 400 agents are trained to assist our customers and Lesotho postal services, through their large rural footprint, also enable us to reach the unbanked rural population. This is to allow us to reach even the most marginalised people who are not able to access financial services provided by commercial banks.

I think instead of competing with banks, we are complementing what they are doing in that institutions such as  insurance companies that keep their money with banks serve our clients who in return choose to pay their premiums using the M-Pesa service. It has become much easier for people to make their insurance payments timeously because they wouldn’t have wasted time in long queues. We have basically improved communication between financial entities.

LTYour company is a leader in offering and promoting technological services. Is there a time in future when M-Pesa would be available online or on more advanced devices such as smartphones?

Mphunyetsane: We are launching M-Pesa online access channels in a few weeks where customers can access the menu on their smartphones or personal computers in addition to the existing USSD channel used via mobile phones. However, our main focus at the moment is ensuring that our customers who do no not have access to internet and do not have smartphones can enjoy the benefit of our financial service. Currently, Vodacom’s 3G network is virtually available across the entire country, and to allow for more of our customers to be able to access internet services we have  introduced low-cost smartphones to expand for all our customers to be able to access internet services. Concurrently, we have recently launched LTE that provides world-class internet speeds and enhances the speed of internet services. Thus, we have ensured that all our customers have a variety of different channels through which they are able to access the M-Pesa service.

LT: What challenges has M-Pesa faced since its implementation and how has Vodacom worked to overcome those challenges?

Mphunyetsane: Our main challenge is customer-education and awareness about M-Pesa. We still have a lot of customers who do not know what M-Pesa is and how it works. I would therefore appeal to customers who are already enjoying the benefits of M-Pesa to spread the good word to their families and friends to transform their lives.  In order to ramp-up education and awareness, we have introduced M-Pesa educational radio programmes on local radio stations. On these programmes, customers are also allowed to call in and ask questions that they may have about the service. We also have our call-centre that can be called by all our customers to receive step-by-step guidance on how to use the service. Furthermore, we have on-the-ground activations where our promoters help customers to register, as well as, assist them on how to make transactions.

LT: Vodacom is one of the companies in the private sector that has been complementing government efforts in its mandate to improve communication. What activities has Vodacom put in place to ensure the government has resources useful to support such initiatives like M-Pesa?

Mphunyetsane: Our M-Pesa venture has garnered a lot of support from government institutions such as the Ministry of Finance and Central Bank of Lesotho, which are also working to address the challenge of financial exclusion to ensure all Basotho, irrespective of where they are located, can access financial services. We work very closely with the Financial Intelligence Unit (FIU) which is responsible for combating moneylaundering which can occur through M-Pesa. Vodacom has put several controls in place that minimise moneylaundering activities through M-Pesa. We have tried to make it as safe for our clients as we possibly can.

LT: Vodacom has often reiterated its mission to have a cashless society. What other future plans should we expect from the M-Pesa brand?

Mphunyetsane: We are currently working on expanding our service to include cross-border payments. Our customers will soon be able to send and receive money from South Africa through M-Pesa. We also plan to introduce enhanced services that will bring more convenience to our customers as well as excellent customer-experience.

 

 

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