Safaricom Mpesa Paypal Accounts deal is huge for the Kenyan Digital Economy
As someone who has been using PayPal for almost ten years now, the announcement this morning that Safaricom has made a deal with Paypal and TransferTo to enable movement of funds between M-PESA and PayPal accounts, is something to be excited about. But first, I had to check a few things before I started celebrating. One we have been here before with Equity Bank and though that service work, it takes too long., three days to a week. For all I know with the money received from PayPal, most people usually want to use it immediately and the idea that you have to wait for more than a day or two is something that does not work for many. That is why people continued to use the friends alert ( I call it peer to peer to transactions) or third party services which is more of bulk peer to peer transactions.
It is simple, you have money on your Paypal account, you ask your friends if there is anyone of them who want Paypal dollars in exchange for the hard Kenya shillings. This is how it works….A send Paypal dollars to B’s PayPal account while B send equivalent Mpesa amount to A. There are Kenyans who constantly buy services online and even if you do not need the dollars at the given moment, you are sure you will need them soon. Those are the guys who constantly provide market for those who find themselves with Paypal dollars but need Kenya shillings.
Then there are clever Kenyans who started services to do the above in bulk. They created platforms that you can go to anytime and exchange PayPal account dollars for Kenya shillings at commission or a fee. Some of the prominent ones are Dollarpesa, Chura, Epaykenya, Pioneer, Premierpesa. The problem with such services has been the high commission people have to pay to get the cash. And because of that, majority of those I know use the friends alert route, though I would love to know how the above services are doing in terms of volumes.
So for this announcement, a part from checking the timeline the money would take to be transferred from the PayPal account to Mpesa or vice versa, the cost if any was also of great interest to me. I did connect my PayPal account to Mpesa and tried to transfer some money. According the process, it promised to get the transaction done in two hours. And yes I received the money within two hours as promised. Two hours’ timeline is great though according to NTV, the time would depend on the amount one is trying to transfer. I will have get someone from Safaricom to confirm this.
I also realized that there were no charges for transferring the money from the PayPal account to Mpesa. I guess many users will be happy with that, though it has the potential of instantly putting the above mentioned services out of business. When you receive money through Paypal, the Paypal service charge is around 3 to 4 percent. The commission normally paid to the third party services, meant double charges and that is something that I think would make many people to opt for MPESA PayPal service.
To connect your PayPal account to MPESA, one need to visit the M-PESA PayPal portal on https://www.paypal-mobilemoney.com/m-pesa.
And according to the portal PayPal Mpesa Mobile Money Service operated by TransferTo will be able to do the following with your Paypal account:
- Access some of your profile information.
- Full name,
- Birth date,
- Email address,
- Address line 1,
- Postal code,
- Phone number,
- Account type,
- Account creation date,
- Account verification status,
- Age range
- Charge your account for future purchases (from Mpesa to PayPal)
- Access your PayPal account balance and display it to you for convenience.
It is important to note that when you connect your Mpesa number with PayPal account, your MPESA balance might be used when you try to make purchases through Paypal and that is what they call “Charge your account for future purchases” They account will first use the PayPal account balance, if there is no enough money there, then check the connected card and finally Mpesa account. So people need to be aware of this else we will hear some ignorant claims in future on how Safaricome and PayPal are stealing people’s money.
In terms of Forex exchange (Dollars to Kenya shilling), it looks more like a bank exchange rate than a Forex Bureau rates. Today exchange at the time I did the transaction according to xe.com was 1 USD = KES 101.080
Meanwhile the PayPal Mpesa Mobile Money Service rate was 1 USD = KES 98.24.
All in all this service was long overdue…….