M-PESA targets 10 million customers in 3 years

Speaking at the launch event of M-PESA at VodaWorld in Midrand, Vodacom director Romeo Kumalo said: "We are targeting 10 million customers in three years."

Utilising technology developed by the Vodafone Group, M-PESA is hailed as a "fast, safe and easy way to transfer money from person to person and is a revolutionary way of making cellphone technology work to serve a basic need."

The new service is modeled on a successful version in Kenya, where according to Vodacom Group CEO Pieter Uys, 12 million people have already adopted the M-PESA money transfer service, which also accounts for more than half of all money transfers in Kenya.

The service is also available in Tanzania, with three million customers already signed up, according to Uys.

Sending money between registered M-Pesa users costs R2.45 in transaction fees, while sending money to non-M-Pesa users costs R10. Withdrawing money costs six rand.

"The beauty of this service is the ease and speed with which people can send money to each other anywhere in the country. As anyone can receive M-PESA without having to be an M-PESA customer or even a Vodacom subscriber, it has the power to reach all cellphone users.

"The combination of Nedbank's banking expertise, our knowledge of mobile communications, and Vodafone's technology and experience of providing M-PESA in other markets has allowed us to bring this world-class service to South Africa," Uys said.

Nedbank group chief executive, Mike Brown added: "In South Africa, cellphone penetration is extremely high, and yet it is estimated that more than 13 million economically active South Africans do not have a bank account. By providing basic financial services accessible to all, M-PESA is well positioned to drive economic activity.

We also believe that it will contribute significantly towards easing many of the burdens currently faced by the unbanked in South Africa, thus bringing marginalised individuals into the economic mainstream."

Through M-PESA, money can be loaded onto a Vodacom cellphone at any M-PESA outlet. Outlets include retail stores, spazas, community service containers and all Nedbank branches.

At outlets customers can register for the service and also deposit money into their M-PESA account or withdraw it as cash. Once customers have money in their M-PESA account, they are then able to send it to any other cellphone in South Africa. The receiver can then redeem the cash at an M-PESA outlet or a Nedbank ATM.

Only Vodacom customers can send M-PESA but anyone with a cellphone can receive it, the group said.

In addition to the extensive distribution base already in place, PEP Stores, the Pick n Pay Group (PIK) including Boxer stores, and Massmart (MSM), which includes Game and Masscash, have all confirmed their interest in participating in M-PESA.

"Commitments have also been received from several other major retailers such as Edcon's Edgars, CNA, and Jet outlets as well as GloCell and Altech Autopage. Blue Label and Smart Call are also recruiting small and medium sized outlets across the country including in many rural areas," Vodacom said.

"The number of M-PESA outlets is growing daily. A level of technical integration is required which will take some time so you will see additional retailers start to offer M-PESA over the coming weeks and months We encourage retailers to contact us to become M-PESA outlets - it's a great opportunity for entrepreneurs to partner with trusted names like Nedbank and Vodacom," said Uys.

Nedbank said that security has been designed into the system at every level and M-PESA conforms to the safety requirements expected of all mobile banking products. Customers access their accounts using a four digit PIN code and as long as that PIN remains secret only they can access the account.

"M-PESA isn't just another mobile banking product. By combining the right partners, proven technology and a trusted distribution network, M-PESA is set to revolutionise how money is transferred in South Africa.

"By making basic financial services available to all South Africans and creating entrepreneurial opportunities, we think that this really could be a catalyst for economic development," Uys concluded.