Vodafone announced today that having acquired licenses to run mobile financial services in Europe and aims to bring M-Pesa to the unbanked population of Central and Eastern Europe. M-Pesa is the digital money that has almost revolutionized banking system in Kenya and Tanzania, with serious potential beyond these countries. Romania becomes the first market in the region to start using the digital money as of today, while plans to further expand it to other CEE countries with low levels of banking penetration are underway.
Vodafone said the mobile money transfer and payment service, launched in Kenya 7 years ago, is now an extremely popular way of carrying out basic banking transactions. It has almost 17 million active users and 86,000 authorized agents across several emerging markets, with these numbers set to grow further with the addition of CEE countries.
It allows people with no bank account to make or receive money transfers and keep track of their money flow via Vodafone’s secure mobile financial system. As of today, M-Pesa is operational in several countries including Tanzania, South Africa, India, Afghanistan, Egypt, Fiji, Lesotho and Mozambique.
The system is so successful that today over one third of Kenya’s $45 billion GDP is conducted via the M-Pesa system. Across all markets, it facilitates €900 million worth of person-to-person transactions per month.
In its press release Vodafone declared they now aim to introduce M-Pesa to 7 million Romanians who conduct transactions mainly in cash. The system will work over any of Vodafone Romania’s mobile network connections, including 4G services, which launched in 2012. Romanian M-Pesa customers will be able to transfer as little as one new Romanian leu (0.22 euro cents) and up to 30,000 lei (€6,715) per day.
Vodafone Director of Mobile Money Michael Joseph said: “The majority of people in Romania have at least one mobile device, but more than one third of the population do not have access to conventional banking. Vodafone M-Pesa is already used regularly by nearly 17 million customers and we look forward to bringing the significant benefits of the service to the people of Romania.”
Romanian users will be able to activate M-Pesa at any one of around 300 Vodafone Romania stores and participating retail outlets, as well as through authorized agents. In addition to depositing or withdrawing cash, Vodafone Romania’s customers can also pay utility bills and purchase goods such as flowers, newspapers and a coffee. The company aims to extend the agent network to other parts of the country, comprising a total of 2,000 retail and distribution points by the end of 2014.
After acquiring the required licenses to operate M-Pesa in Europe, Vodafone will undoubtedly seek to expand the system to other markets where cash usage outweighs the banking, with Central and Eastern European countries being on the top of the list.