Mobile transactions outsmart banking

The newly introduced cellphone-to-cellphone moneytransfer has made impact on the lives of thousands of people in Tanzania who cannot access banking services.

M-PESA, meaning M for mobile and Pesa for money in Kiswahili, is one of the world`s first cellphone-to-cellphone PESA transfer services for people who do not have access to conventional banks.

This highly sophisticated first-world technology makes it possible for Tanzanians who do not have ready access to banking to safeguard and distribute their capital.

The economic benefit, especially in rural areas, is enormous.

During the launch of the service in May, at least some 4.1 million Vodacom customers in the country were projected to use their mobile phones to send money home and to loved-ones safely and securely with the new Vodafone M-PESA service.

Vodacom\'s marketing manager Ephraim Mafuru told The Guardian on Sunday that about 1.6 million customers across the country use the service.

Many Tanzanians now praise vodacom Tanzania for initiating the M-Pesa service because it has enabled people to transfer money in easier way than ever before.

``Through the service, we are now able to send money to our parents back in the village, ``said Rose Matiku, a resident of Tabata in the city.

She said the service has reduced the trouble of sending money to her parents who lives in Tarime, Mara region, adding that M-PESA is one of the greatest achievements of Vodacom, the cell phone company.

M-PESA is an innovative mobile payment solution that enables customers to complete simple financial transactions including person to person money transfer.

It is aimed at mobile customers who do not have a bank account, either by choice, because they do not have access to a bank or because they do not have sufficient income to justify a bank account.

It has been designed so that people without bank accounts can use it. The money is held safely in a bank account run by M-PESA on behalf of the customer, who does not need to have any contact with the bank.

One’s account can have as much or as little money in it as you like, between zero and Sh1,000, 000 at any time.

A customer is not charged on a pay-as-you-go basis every time you do a transaction, but charged only for the transactions initiated.

While many would opt to use their airtime for Vodacom to top up M-pesa account, the latter is completely separate from the Vodacom airtime. One cannot buy M-pesa value using airtime.

However, you can use your M-pesa value to buy airtime for your own or another Vodacom subscriber’s phone. Vodacom subscribers do not need to be registered for M-pesa to receive airtime from you.

Customers who use the unique service access other banking services like money deposit, withdrawal and transfer (send) to another M-pesa customers. Besides, they can also send money to someone who isn’t an M-PESA customer and they do not necessarily need to be Vodacom customers.

Vodafone M-PESA was originally developed and deployed by Vodafone in Kenya, where the service has now been running for over one year, with more than 1.6 million active customers.

Speaking with The Guardian on Sunday, Vodacom Tanzania managing director Dietlof Mare recently said Vodafone M-PESA is a service that is expected to revolutionise the way Tanzanians manage money.

``Of the 21 million Tanzanians over the age of 16, only 1.6 million currently have a bank account, but more than 7.5 million Tanzanians have a cell phone or have access to a cell phone,`` Mare said.

``Along with neighbouring Kenya, Tanzania is fundamentally a cash-based economy, and this service will provide an instant, effective and secure way for Tanzanians to send, store and receive money, wherever they are in the country. We welcome them to the Vodafone M-PESA community.`` he added.

Benjamin Mashibe, a senior economist in the city, terms the introduction of M-PESA service as a revolution in the financial sector in the country, that goes along with changes of the 21st Century.

He said the service has come at a time when a big number of people in the country do not access services of other bigger financial institutions.

``I`m happy that Vodacom has seen it right to start such a service that will save the majority of the poor population from difficult banking services.``

M-PESA allows you to transfer money simply and securely in a few seconds by using SMS. This has many benefits to customers in terms of convenience, security and ease of use.

The pricing is competitive compared with other formal money transfer services.

To load money into your M-PESA account you need to go to a registered M-PESA Agent, typically a local network airtime reseller or other retail outlet, and make a cash deposit which results in electronic money moving into your account.

You can then send money to another mobile phone user via a phone instruction. When anyone wants to get cash out of their M-PESA account, they need to go to an M-PESA agent and make an electronic transfer to the agent who will exchange this for cash.

Only customers who have a Vodacom SIM are able to open an M-PESA account. However, the person you are sending money to, does not need to have an M-PESA account or be a Vodacom number.

The M-PESA service is cheaper if you send money to a registered M-PESA user.

M-PESA agents are, generally, Vodacom airtime dealers. However, the range and type of Agent is continuously being extended to maximise coverage and convenience. For example, Agents currently include petrol station chains, supermarkets, cybercaf�s, and independent retailers.

* SOURCE: Sunday Observer