Tag Archives M-PESA

Scaling up lessons from M-PESA

Posted on 3 min read

Building a good product is hard. Getting people to use the good product you have built is even harder. I have seen the careers of many developers come to an end because they thought that having the perfect product would mean mass adoption, only to realize that no one was interested in their apps. Why does this happen? Because it takes more than a good product to sell. It takes skills and effort to market, it takes marketing research, it takes money to advertise, and sometimes, it takes chance.

M-PESA was launched in Kenya at just the right time. First, it was a perfect product for a market where sending money to someone in the next town was as unreliable and as slow as sending a letter. M-PESA promised to change all that, and they did exactly that. But how did it get mass adoption in Kenya? Safaricom had made the onboarding process very easy, where one needed just a National Identification card. They also made it a big show, where everybody got to hear about it and curiosity was rife. With a good budget and advertising team, it was possible to enroll some people. However, past that Safaricom needed two things:

  • A critical mass of people to register for M-PESA
  • M-PESA agents being available everywhere

Safaricom had two genius techniques to achieve these two.

Getting the masses to register for M-PESA

Safaricom allowed one to send money to both the registered and unregistered M-PESA users. It was cheap to send money to registered M-PESA users, but expensive to send to money to people to people who had not registered for M-PESA. The implication of this was that before you sent money to any person, you had to confirm if they were registered or not. If not, you would ask them to find someone nearby who was already registered and send to them instead. This idea of receiving money through a proxy was not appealing, and this would be enough to make someone to register.

With that, Safaricom turned M-PESA users to M-PESA evangelists.

Getting agents in every corner

The success of M-PESA was pegged on availability of agents in all places. This is currently the reason why other mobile money platforms have failed to gain traction in Kenya, because you cannot find their agents. With M-PESA, you probably need to turn around to find an agent, that is if there is no M-PESA agent right in front of you.

How did M-PESA manage to get so many agents? The first thing was the revenue sharing model. When one sends money through M-PESA, they are charged some transaction fee. This fee is shared between Safaricom and the mobile money agents involved. For this reason, people realized that they could actually make money by becoming M-PESA agents, and soon every shop and stall added M-PESA agency services on the sideline.
Safaricom followed up by providing the necessary branding merchandise. An M-PESA agency outlet looked cool. With that, they now needed to vet who wanted to be an agent, as too many people were trying to jump into the train.


It was not that easy, and Vodafone cannot replicate the same fete elsewhere. The most sure way to know if your start-up or business will scale is simply to try it out.