“Fifty bob,” shouts the matatu conductor. I’m squashed between at least fifteen other people on the ramshackle minibus, frantically fumbling for my wallet and hoping that I haven’t, once again, left it at home.  I give the conductor an apologetic look and shake my head. “Sorry,I don’t have any money.”

“It’s okay Madame.Do you have M-Pesa?”And just like that, after an exchange of phone numbers and an SMS, my problem is solved. There will be no borrowing off strangers or hitchhiking down the Nairobian highways today.

Since 2007—when it was launched by telecoms giant Safaricom—this simple yet innovative mobile phone technology has transformed the lives of millions of Kenyans and changed the way business is done in the country. M-Pesa—M stands for mobile and Pesa is the Swahili word for money—is an SMS money transfer system which allows people to send, receive and store money through their mobile phones. It was initially introduced as a system to allow microfinance-loan repayments to be made by phone but, judging by the bright green M-Pesa signs plastered on every corner, it has penetrated all levels of Kenyan society, from the chaotic Kibera slums to the isolated Turkana plains.

“The traditional banking system is inaccessible to many people in Kenya. It is difficult to get an account and to physically access bank locations,” says EcoZoom co-founder Amanda West, reflecting on the incredible success of M-Pesa in Kenya. “Safaricom saw the need and fulfilled it. It did an excellent job with the infrastructure and making the application easy to use on a smart phone and feature phones.”

“The use of mobile money was one of the attractive features of opening an EcoZoom office in Kenya,” says West. EcoZoom uses M-Pesa to send and receive money from users and distributors and even has a pre-pay program that lets clients send small instalments over time to pay for their stove.

Sending and receiving money electronically and with very small transaction fees is a big benefit for businesses, whilst from the customer’s perspective M-Pesa is a safe way of purchasing a product remotely without having to travel with large quantities of cash.

According to Safaricom, there are 78,856 M-Pesa agents in Kenya and almost 37,000 merchants that receive mobile payments—not counting small business owners who simply use their own phone numbers. Almost 80 percent of people with mobile phones use them for mobile payment and banking and approximately 43 percent of Kenya's $US40 billion gross domestic product flows through the system.

The success of M-Pesa arguably comes down to its simplicity, which makes it attractive even to illiterate and isolated communities, circumventing infrastructure problems and increasing financial inclusion of the poor. The only information required to send money is a phone number, the amount, and a pin. M-Pesa is starting to do well in other countries, including Tanzania, Afghanistan and India, and other some countries are developing similar mobile money systems.

The triumph of mobile money in Kenya, the world’s leader in this technology, opens up vast opportunities for innovation and connectivity.

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