Vodacom and Nedbank launch mobile money revolution in South Africa

Vodacom and Nedbank announced the official launch of the M-PESA money transfer service in South Africa utilising technology developed by the Vodafone Group. M-PESA is 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, common to millions of South Africans. Combining the strengths of these industry leaders, M-PESA is expected to repeat in South Africa the success seen in Kenya, where a staggering 10 million people have adopted M-PESA as the answer to their need for a convenient and trusted money transfer service.

Pieter Uys, Vodacom Group CEO, explains: “There are other cellphone banking products and money transfer services out there, but there quite simply is nothing like M-PESA. 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. M-PESA caters for all South Africans and is specifically designed to include those who do not have access to bank accounts.”

Mike Brown, Nedbank Group Chief Executive, agrees: “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.”

Cenk Serdar, Director of Mobile Payments, Vodafone Group adds: “Mobile technology has already improved the lives of millions by providing access to communications. The successful roll-out of M-PESA in countries such as Kenya and Tanzania has shown that our technology can meet the the demand for easily accessible secure payment services, particularly for those who were previously excluded from the existing systems.”

Sending money by M-PESA is like having instant cash in your hand. Money can be loaded onto a Vodacom cellphone at any M-PESA outlet. Outlets are 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 can 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. They may also choose to buy airtime or transfer the money to another person. Only Vodacom customers can send M-PESA but anyone with a cellphone can receive it.

In addition to the extensive distribution base already in place, PEP Stores, the Pick n Pay Group including Boxer stores, and Massmart 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.

Explains Uys, “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.”

At launch M-PESA is offering basic money transfers but Nedbank and Vodacom are in the process of implementing additional services such as paying bills and buying goods. In Kenya and Tanzania, M-PESA has been extended to allow customers to pay for school fees, insurance premiums and even put money into savings accounts. Customers can also receive payments such as salaries and dividends.

“M-PESA works just like cash, but it is safer and more convenient to transfer. The technology is simple to use on any cellphone and there are no monthly charges or minimum balance requirements – meaning that the service will be accessible to everyone across the country.” adds Brown.

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.

Concludes Uys: “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.”