MOBILE PAYMENTS INTEGRATION: SOLVING PROBLEMS FOR KENYAN MICRO, SMALL, AND MEDIUM ENTERPRISES

Abstract

In 2007, Safaricom, the leading Kenyan mobile network operator, successfully deployed a mobile money system called M-PESA that revolutionized the payments industry in Kenya. Although Safaricom envisioned M-PESA as a person-to-person money transfer system, users began using M-PESA in other contexts as well, notably for business transactions. Business transactions have a set of requirements different from person-to-person money transfers. As a result, businesses have had trouble successfully integrating these mobile money systems to collect payments. In order to more precisely pinpoint the integration problems, we outline the major problems businesses face when attempting to use mobile money for payments, existing solutions that mobile network operators and third party players provide for these problems, and what remains to be solved. We use a case study of a venture currently operating in Kenya in order to further understand the pain points. Our conclusions lead to a more precise discussion on what issues need to be resolved to achieve more seamless mobile payments integration and how they are currently being tackled.