Western Union Safaricom Mpesa deal..not bad

Humble Pie.  Those are the words. Just like Kenyan Banks, Western Union finally saw the light. Sometime back  I did comparative cost of sending money in Kenya through Western Union, MoneyGram, PostaPay in one hand Mobile Money Transfer (Mpesa and Zap) on the other hand here. And it was easy to see why people will go for Mpesa anytime of the day.

Anyway, at long last Western Union made a deal with Safaricom to allow the Mpesa customers to receive international money transfers from 45 countries and territories. So using any of the 80,000 Western Union agent locations across the globe, people can send money direct to Mpesa account.  Good news for the Kenyans living abroad and their families back home.

“@kenyafreelancer:  What does MPesa going global mean to the local mwananchi & the growing ecommerce market in .ke? @kachwanya @bankelele @alykhansatchu”

Great question there by @Kenyafreelancer on twitter, a day after Mpesa went global.

Two answers, both for receiving

1.      Convenience

2.       Reduced Cost

Before this deal, receiving money from abroad was not that easy, more so for the rural folks. If you are based in Nairobi then it is easy to walk to the Western Union , MoneyGram  or Posta pay offices  and get your cash. That is not the case for people in the remote parts of Kenya.  According Western Union website:

More than 590 locations in Kenya are at your disposal to send and receive money in a fast and reliable way.

I am not sure on the distribution of those locations in Kenya but one thing is for sure, most parts of Kenyan is not covered by them.  I know Western Union has partnered   with some local banks to act as their agents but that still does not make it easy or better.  Take Nairobi for example, a walk between two Western Union offices there are more than twenty M-pesa agents in between.  As you move away from Nairobi it becomes worst.

That aside the reality is, the large share of remittances from abroad are send directly to the people in the rural areas.  With few Western Union agents available most people in the rural areas travel long distances to get their money.  Sometime they have to trust somebody else to withdraw the money for them. But with Mpesa deal, things are going to be much easier.

With long distance to cover to access the cash, the transport and others add up to the total cost of receiving the cash. Sometime these guys are sincerely broke that telling them to travel that long distance to get their money is pure torture. And that is why I think  Mpesa  Western Union option is perfect.  Save time ,save money.  Brilliant.

For sending

It is easy to just talk about the remittance but the cost of doing so in the real world is very high. Ranging from 3 to around 10% and that is why most people prefer informal channels like using family or friends to physically remit the money. Very risky.  The cost of sending money through Mpesa as we know is very low but I am not sure whether Western Union will reduce their cost to match that of Mobile Technology level. So ?????

Ecommerce..mcommerce

Kenyans are bypassing what has been very successful in the other parts of the world Ecommerce and going directly to mcommerce. So far I have seen that people have no problem paying for something whether service or goods through mpesa but  tell  them to do it through internet and you get all the  mmmmh.  I guess we will never know what should have been with Ecommerce but thank God we have mcommerce. Can the people on the Diaspora participate actively on the growth of the mcommerce  in Kenya with this arrangement? Yes. The fact that the remittance is now higher than the aid we beg for every year,  is clear testimony that these guys are both emotionally and spiritually attached to Kenya.