by Xinhua writer Ding Lei
NAIROBI, Sept. 28 (Xinhua) -- Africa's fast-growing mobile payment market is offering opportunities to enhance financial access and tap the continent's "digital dividend" potential, said a senior executive of Africa's leading fintech platform operator.
In a recent exclusive interview with Xinhua, Sitoyo Lopokoiyit, CEO of M-Pesa Africa, spoke about how digital payment technology has transformed millions of lives that largely remain unbanked across African continent.
"When M-Pesa started, financial inclusion in Kenya was some 20 percent. But today it's well above 85 percent, making the country the third highest in Africa in terms of financial inclusion," said Lopokoiyit who is also chief financial services officer at Kenya's telecommunications service provider Safaricom PLC.
Launched by Safaricom in 2007, M-Pesa is an electronic mobile money service that allows users to deposit, withdraw and transfer money, pay for goods and services, and access loans and savings product.
M-Pesa, however, was not originally created to be a fintech and digital ecosystem brand, rather a simple proposition to help people send money to each other via Short Message Service.
Due to rapid urbanization in Kenya, a large number of people moved from rural areas to cities for jobs and sent money home to support their families. But remitting the money back used to be challenging as the migrant workers either needed an envelope and a bus courier to send money back or they had to leave the city where they worked to take money home.
"As an example for myself, my family is 550 kilometers from Nairobi. And it meant taking a whole day's journey to go and give my mother money every other time," Lopokoiyit recalled. "M-Pesa changed it all and has been key in driving financial inclusion across African continent."
M-Pesa now boasts more than 50 million monthly active users across seven African countries of Kenya, Tanzania, Mozambique, the Democratic Republic of Congo, Lesotho, Ghana and Egypt, with 500,000 businesses transacting over 7 billion U.S. dollars every month on M-Pesa platform.
Will Meng, CEO of Huawei Kenya, told Xinhua in a separate interview last week that M-Pesa has brought real benefits to Kenya and played a crucial role in the East African nation.
"Nowadays when we walk on the streets in Kenya, whether shopping at malls or dining in restaurants, almost everywhere we can use M-Pesa to make payments," said Meng, noting that M-Pesa has also played a part in the fight against the COVID-19 pandemic as people reduced reliance on cash to minimize the risks of COVID-19 transmission.
As a result, M-Pesa has become a more important platform for people amid the health crisis, with transaction value increasing 58.2 percent year on year during April 2020 and March 2021.
A recent survey by global consulting firm Dalberg showed that 94 percent of Kenyans older than 15 years of age use mobile money and 44 percent increased their usage during the pandemic.
Since the outbreak of the pandemic, Africa has accelerated digital transformation, with the digital economy playing a crucial role in fostering opportunities, creating jobs, and scaling up economic recovery on the continent.
Lopokoiyit said mobile money technology has changed globally. Talking about M-Pesa's next move, he is ambitious about making M-Pesa not just about payment but about a platform integrated into people's daily life from the morning they wake up to the evening they go to sleep.
In December 2020, M-Pesa introduced its super app service with the aim of growing itself into a payment lifestyle brand that gives users a 'one-stop shop' for all their needs.
Chinese telecom giant Huawei since 2015 has been supporting the core platform of M-Pesa by providing secure, stable, innovative and scalable technology. Meng said Huawei will continue to assist M-Pesa in evolving into a multi-purpose ecosystem that creates more digital benefits.
Sub-Saharan Africa has been at the forefront of mobile payment industry for more than a decade. According to a report released by GSMA, an international association of telecommunication service, Africa had 161 million active mobile money accounts as of end-2020, an increase of 18 percent year on year.
A report jointly produced by Google and the International Finance Corporation estimated that Africa's internet economy would reach 180 billion U.S. dollars by 2025, accounting for 5.2 percent of the continent's gross domestic product (GDP). By 2050, the potential could further grow to 712 billion dollars, or 8.5 percent of the continent's GDP.
According to the e-Conomy Africa 2020 report, propelling the growth is a combination of increased access to faster and better quality internet connectivity, a rapidly expanding urban population, a growing tech talent pool, a vibrant startup ecosystem, and Africa's commitment to creating the world's largest single market under the African Continental Free Trade Area.
As Africa and China both are making progress in digital competitiveness, Lopokoiyit believed that there are good opportunities for Africa to partner with China and make the digital technology reach more people on the continent. Enditem