Vodafone M-PESA (A): Turning a corporate social responsibility innovation into a mainstream business opportunity

Case Abstract

Vodafone, a world leader in mobile telecommunications, in partnership with Safaricom, the leading Kenyan mobile operator, launches a service that allows registered users to transfer money from their mobile phones to other mobile phone users. Users simply load their M-PESA account with cash, transfer the money through a secured SMS, and the recipient can convert it to cash via a local air-time reseller.

Vodafone, a world leader in mobile telecommunications, in partnership with Safaricom, the leading Kenyan mobile operator, launches a service that allows registered users to transfer money from their mobile phones to other mobile phone users. Users simply load their M-PESA account with cash, transfer the money through a secured SMS, and the recipient can convert it to cash via a local air-time reseller.
While it is not the world’s first mobile money system, it is certainly the most successful, with 11 million registered users in just three years (50% of Kenya’s adult population), tens of millions of transactions per month (more than Western Union globally), and over 30 billion Kenyan shillings of transfers per month (15% of Kenyan GDP). Vodafone is now rolling out M-PESA in Tanzania, Afghanistan, South Africa and Fiji.
The case explores both the internal and external factors that underpinned the success story. It highlights the innovation track pioneered by a major international corporate player outside the traditional corporate process, leading to the creation of new services for new markets, which – once successful – can be reintegrated into Vodafone’s core business for further replication.