Product details

M-Pesa is an innovative mobile-phone-based money transfer service from Safaricom, the largest mobile network operator in Kenya. M-Pesa allows users with a national ID card or passport to deposit, withdraw and transfer money to other users via SMS easily. Originating from the notion of using mobile technology to help customers make payments to microfinance institutions, M-Pesa had transformed itself into a nationwide money transfer service used by millions of people in Kenya, with the total transfers amounting to three times the national GDP of the country. Given its early and rapid success in Kenya, the company is now expanding to other considering neighbouring countries, including Tanzania and South Africa. Unfortunately, success is not replicable easily. The case describe the main elements of the M-Pesa system in Kenya, placing special emphasis on STI design and implementation. It allows students to reflect on how business model innovation must be aligned with cleary operations and technology. It also allows for discussion on which marketing and operational aspects - ie, branding, pricing schemes, channel management and distributors' policies - are key for the successful Implementation of a business model in an emerging economy in which most of the population is at the 'bottom of the pyramid.' Based on an understanding of the M-Pesa model, discussion can be expanded to analyze the different elements of whether the business model can be replicated in other country clubs considering the different cultural and socio-demographic and competitive landscapes.