Kenyan mobile payment service M-Pesa enters the remittance market

M-Pesa, a mobile financial service offered by Kenyan telecoms giant Safaricom, is making strides in the remittance market through a partnership with e-commerce giant Amazon.

The service, launched in 2007, has grown to become a major financial service provider in the East African region, with over 50 million monthly active customers as of September 2021.

M-Pesa has a significant presence in Kenya, with over 30 million customers, and also operates in other African countries such as Tanzania, Lesotho, Ghana, Mozambique, Egypt, and the Democratic Republic of Congo. Its customers conduct transactions worth more than $314 billion annually, with M-Pesa responsible for 60% of formal remittances in Kenya and 20% in Tanzania.

Amazon is rolling out PayPal’s Venmo as a payment option
Amazon has rolled out Venmo, the payment service of PayPal that allows users to send money to one another, as a payment option at checkout on its platforms. Starting with its US-based customers, the feature will be available in the Amazon app and on amazon.com, giving users more options

M-Pesa's partnership with Amazon is not the first time both companies have been in talks. In 2021, Bloomberg reported that the two were discussing incorporating M-Pesa as a payment option on Amazon. This development is expected to further drive M-Pesa's growth and solidify its position as a leading mobile financial service provider in Africa.

According to World Bank data, the remittance market in low and middle-income countries grew by 5% to reach $626 billion in 2022. M-Pesa, therefore, sees this as an opportunity to diversify its services and grow its market share.

Paystack launches in Kenya to enable businesses receive payments
Pan-African payments startup Paystack, which was acquired by Stripe in October 2020 for $200 million, has been granted a Payment Service Provider license by the Central Bank of Kenya (CBK) to enable it kickstart operations in the East African country. With this licence, Paystack will enable Kenyan…

M-Pesa faces competition from established players such as Western Union and MoneyGram, but analysts suggest that a planned separation from parent company Safaricom could attract new investors and increase M-Pesa's valuation. A split would allow for efficient capital allocation and create value for shareholders.