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Michael Joseph unveils first M-Pesa service in Europe

Former Safaricom chief executive Michael Joseph addresses a press conference during the launch of M-Pesa at a Nairobi hotel. Photo/FILE
Former Safaricom chief executive Michael Joseph addresses a press conference during the launch of M-Pesa at a Nairobi hotel. Photo/FILE 

Former Safaricom CEO Michael Joseph Monday launched M-Pesa in Romania, marking the maiden roll out of the mobile money service in a European country.

Vodafone Romania, a fully-owned subsidiary of Vodafone Group Plc, says it aims to sign up about seven million of its customers at the moment mainly transacting business in cash.

Mr Joseph, the director for mobile money at Vodafone, said the launch was the first of several planned in central and eastern Europe.

The firm has already acquired a European e-licence in preparation for this expansion.

Romanian M-Pesa customers will be able to transfer between Sh26 and Sh792,370 a day, a limit much higher than Kenya’s Sh140,000.

“Vodafone M-Pesa is already used regularly by nearly 17 million customers (globally) and we look forward to bringing the significant benefits of the service to the people of Romania,” he said.

Since the Kenyan launch on M-Pesa in 2007, the service has gained a great reputation locally and internationally, raising the country’s profile as a mobile money service success story.

For instance, Kenyans transacted Sh1.9 trillion on their mobile phones last year (Sh5.2 billion every day), according to Central Bank of Kenya data.

Last year, Safaricom reported a Sh21.8 billion in commissions from M-Pesa, highlighting the contribution of the service to the firm’s bottom line.

Following the Kenya success, several other affiliates of Vodafone — which owns 40 per cent of Safaricom — have tried to replicate the service in their respective countries of operation with varying levels of success.

In the past year alone, the mobile money service has been introduced in Egypt, India, Lesotho and Mozambique. Other countries where M-Pesa is available include South Africa, Tanzania and Democratic Republic of Congo.

In January, Mr Joseph had to step in to rescue the underperforming M-Pesa service in South Africa through a re-launch. Since its launch in August 2010, the service had by end of last year only attracted just 1.2 million customers.

Mr Joseph noted the failure in South Africa was because most people still prefer using credit cards when carrying out transactions.

Pillars

He added the distribution and agent network — one of the pillars of M-Pesa’s Kenyan success — in South Africa was wanting because it mostly depended on retail store partnerships.

In Romania, however, Vodafone is banking on the fact that about a third of the country’s 23 million citizens do not have access to formal banking facilities.

“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,” said Mr Joseph.

“Vodafone M-Pesa can be activated at any one of around 300 Vodafone Romania stores and participating retail outlets as well as through authorised agents, and will be accessible to approximately six million people in both rural and urban areas.”

The telco expects to have a network comprising about 2,000 retail and distribution centres by the end of the year.

Vodafone Romania hopes the launch of M-Pesa will give them a competitive edge over competitors like Orange Romania, Cosmote Romania and DigiMobil just like it has helped Safaricom in Kenya.

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