Western Union Sees African Mobile-Money Transfers `Snowballing'

Kenya’s Mpesa mobile phone-based money-transfer service is becoming more sophisticated and will soon be growing quickly across the continent, according to Western Union Vice President for Southern and East Africa Richard Malcolm.

“It’s jumping to a new level,” Malcolm said in an interview in Cape Town Wednesday. “It’s expanding its own ecosystem. They’re improving in a direction that meets the needs of the customer. It’s a good story. We should see more of those.”

Safaricom Ltd., East Africa’s biggest mobile-network operator, developed Mpesa and says 88 percent of its customers now use the service. Kenya Commercial Bank Ltd., the nation’s second-biggest lender, is looking to attract 15 million customers who do transactions on their mobile phones.

Among innovations offered by Mpesa is that customers can make money transfers between different network operators and between one country and another. Customers will also be able to buy government securities using their mobile phones.

“It’s slowly gaining traction” across Africa, Malcolm said. “It empowers the majority of the population. It brings about financial inclusion. Financial inclusion is critical for the continent. I think this is going to snowball.”

Before it's here, it's on the Bloomberg Terminal.