NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, June 19, 2014

“I feel like a caveman who’s just been handed a Bic lighter,” reported Charles Graeber, a writer for Bloomberg Businessweek who recently went to Nairobi to check out M-Pesa, Kenya’s dominant mobile-money provider.

M-Pesa, which allows Kenyans to send each other money via a simple text message, is invariably cited when Western scribes wax enthusiastic about the miracle of mobile money in the developing world. And it may well seem miraculous to Americans, considering that when they want to send money to a friend, they still typically rely on hand-writing and then mailing a check (how quaint!)—whose recipient, if very technologically advanced, might use a smartphone app to take a photograph and upload it instead of going to the bank.

But Kenyans have already been using mobile money for seven years. And M-Pesa is now just one of 242 mobile-enabled e-money providers operating in 89 countries, boasting 203 million mobile money accounts between them, according to the GSM Association (GSMA), a trade association of mobile carriers. (Some 61 million accounts were active (pdf, p.19) in the 90 days to June 2013.)