Mobile banking has become very popular in the developed and developing world. It is especially beneficial in the developing world because it addresses many of the problems they are facing when dealing with cash currency. Before the use of mobile banking, small business owners and customers were forced to physically walk to each other to transfer payments. This became a problem, especially for women business owners because of the risk of theft. Another issue people living in a rural community face is distance from a bank; in many cases there are not banks within walking distance,making it difficult to withdrawal and deposit money. Because of these issues, along with others, mobile banking has boomed in the developing world.
M-Pesa is a very popular mobile banking program that started in Kenya, with 43% of their current GDP flowing through this system. (ITpro) M-pesa works with any basic mobile phone. It allows users to pay for goods or even withdrawal money from a M-Pesa office or ATM, with a simple text message and without a debit card. M-pesa has become so popular that this payment is accepted at a large variety of places including local markets, and by street vendors. It has also facilitated the transfer of money. Many Kenyan’s send money to their relatives. Before mobile banking, they would send their payments with someone going in the same direction, and many times their money would never reach the recipient. With M-pesa, transferring money to love ones is as easy as sending a text message. Some businesses even pay salary through M-Pesa. There are transfer fees as well as ATM fees, but they are comparable to other bank fees, but much simpler.
This video shows how M-Pesa has been impacting the lives of Kenyan’s.