Innovative Mobile Payment System in Nairobi, Kenya - Essay Example

Nairobi which is the capital of Kenya is one of the cities in the urban global south. It is found in the sub-Saharan region specifically in east Africa. It has a population of about 3 million people. That’s according to the last census in 2009. M-PESA, originally developed in Nairobi, Kenya is a mobile payments system which effectively offers a banking system based on mobile phones. The system applies a simple concept of users paying money in one of the many agents across the city and withdrawals from another agent.

Transfer of money is also possible between individuals by use of a simple menu on the phone. The project which was launched in 2007, with the original idea targeting microfinance repayments was rolled out by Vodafone’s local operator in the country, Safaricom.The system has also enabled its users to transfer money between bank accounts and the system in some markets (Jack and Suri, 19). Residents are also able to pay bills like electricity and water. Withdrawal and deposition of money and transfers from users to non- users is also another service offered by the system.

During its inception, the system faced some diffusion challenges. Reliability and usability of the system were some of the trust issues residents had with the system. But this was taken care of by the Central Bank of Kenya through insisting that customer funds be deposited in a regulated financial institution. Several things can be learnt from this system and be applied to the urban global north. It can be used to address employment by decentralizing banking services thus providing employment to people who will be agents (Merritt, 143).

It is also easier to use and does not discriminate on the basis of literacy levels. The system is worth our attention as it could be adopted by countries in the global north and those in the global south to address their financial service delivery.