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M-PESA is not a Kenyan Innovation

Many Kenyans still believe that 'their' Safaricom owns the patents to the M-PESA innovation. Some Kenyans even claim that Safaricom hijacked their idea and developed it into M-PESA - a court case was once reported on this. The reality being that the system  was 'developed' by Sagentia on behalf of Vodafone, it goes without saying that the corresponding intellectual property (IP) does not belong to Safaricom. That is also not to forget that Kenya has enough software development capacity to build such a system on a robust platform.

Safaricom is paying patent fees to Vodafone just like any other network operator who will wish to use the money transfer platform. It might help for Michael Joseph to clarify if any benefits accrue to himself or others in Safaricom specifically for accepting to be the test platform for "Vodafone's innovation". Such a clarification should of course address the opportunity cost of a more direct contribution to Kenya's knowledge economy through the apparently foregone IP ownership.

I would like to suggest that if for any other reason M-PESA does not succeed in other markets outside Kenya, it will be because the M-PESA is merely a Kenyan innovation, whose success is a direct derivative of  Kenya's patriotism. As such the innovation's success may not be replicated where the corresponding patriotic emotion is inexistent.

Consider the patriotism displayed in the oversubscription of the Safaricom IPO of 2008. Consider the fanatical self imposed network (Safaricom) lock-in of over 14 million Kenyans. Then you might start understanding the success of M-PESA in Kenya. Many Kenyans found M-PESA compelling merely because it was supposed to be a 'Kenyan Invention'. Indeed the M-PESA success story may not be complete without mentioning the sense of belonging and patriotism of Kenyans as an aftermath of 2007/8 election crisis.

Had the 5+ Millions of M-PESA users initially learnt some of the facts in Olga Morawczynski's
article - What you don't know about M-PESA, the service might as well have been struggling as is the case with the Vodacom's attempt in Tanzania. Consider the question - why are ZAP and YuCash - alternatives to MPESA not yet success stories? In my opinion, the technological platform could have been developed by anyone else - including our own software developers. The business processes addressing the socio-economic context could only have come from the Kenyan populace - regardless of who eventually incorporated them into the software.    

I am sure at some point in history, the social scientists will have something to say about the role of Kenya's social-political crisis of 2007 and 2008 in the M-PESA success story.


  1. Quite interesting reading. I honestly did not know this. So, what about the Kenyan court case? That man is lying?

  2. the success in kenya can also be attributed to long queues everywhere, traffic jams etc. Mpesa enables people to bank from their houses

  3. Patriotism! me thinks not, it is all about convenience. You are aware that most of the 'common' mwanainchi do not have a bank account, well, at least the real people on the street... MPesa has offered access to a money transfer system to over 80% of the population that will otherwise not have access to such facilities...One last thing we should be aware of, i.e. MPesa is not a bank, it is a means of transferring cash from one person to another...

    Ps. Patriotism is a term that is usually loosely used, I still do not understand what it all means as far as colonized triangles (countries) are concerned. Or is the example drinking KBL products an act of patriotism?! meaning that Diageo shareholders rip hefty profits

    Ken Thumbi

  4. The people who developed and work on making m-pesa work every day of the year are totally committed and devoted to Kenyans and fully appreciate the importance of this innovation to the Kenyan people and their society.
    This Micro-Finance Initiative would never have succeeded without the leap of faith and trust of the Kenyan people.
    The "innovation" is not the important factor, the system is similar to banking schemes the world over, mondex was the very first I believe
    The fact that so many Kenyans have adopted this system and place their trust in it is what is important, and that is the notable factor. A big part of that boils down to Michael Joseph and the Safaricom team and the Vodafone teams and the Sagentia team who have worked night and day keeping this system up and running.

  5. I agree with all your sentiments, in principle. Incidentally, my point is brought out a little more elaborately by tovuti sanifu on In simpler terms, the trend is such that Kenya might continue being a bottom of the pyramid (BOP) market selling away to the bottomline of other larger economies. This will be the case for as long as suboptimal decisions continue being made by the custodians of our economy.

  6. Despite the fact that smart marketing may have propelled M-Pesa to greater heights, the biggest contributor to its success is the mass distributorship scheme employed to support the service via an agency model. This took money transfer services to every corner of the country. The competing payment systems including conventional banks simply cannot reach as many people with the convenience of the mobile phone despite them probably offering superior services at lower costs.

    The consumer is thus inclined to use M-Pesa either because its the only service he/she knows, or the only service the recipient can access or its simply much more convenient hence the consumer is willing to pay a premium for it.

    So whether it is indigenous or not it simply is a case of someone, somewhere knowing what they are doing.

  7. The apparently slow integration of M-PESA with other global and national payment systems already appears to a symptom of the patent/IP ownership issue. This I believe might become M-PESA's achilles heel. Consider a case where YuCAsh and/or ZAP come up with better integration with locally developed online payment systems and local merchant payment systems.

    For example, a Multi-Choice employee once discouraged me from paying for DSTV using M-PESA - encouraging me instead to use ZAP which was faster and more reliable according to the employee. Whether the apparent slowness and unreliability of M-PESA for this payment was administrative or not, I still feel that the running in the background of a service so critical to Kenyans like M-PESA should be a little more open. For instance up until now there does not seem to be any publicly published API to integrate third party software applications with M-PESA.

  8. ..and along came JamboPay from Kenya , by Kenyans,for Kenya

  9. i like this article, it is very true, did you know that even the MPESA API is owned in the UK! not even safaricom developers have access to it! ok on ZAP and YUcash i would blame them, their marketting strategies were so wrong(they have kinda always got it wrong),but i must admit MPESA is doing good because it has made it very convinient for people to do their transactions, i am not an MPESA/saf member but i have seen how it is working well for pple, so i could say if vodaphone did enouph marketting in tz they could do good,on the legality of it and ownership, i think MJ is playing us!!
    regards, geekmate!

  10. I would like to congratulate JamboPay, that is a Kenyan system for Kenya. Their young team inspired many during the AITEC Banking and Mobile money conference COMESA in Nairobi 24th-25th Feb. Jambopay is by Webtribe a NEW KENYAN TRIBE!

  11. once upon a time, in 2002, I and a colleague of mine, then working with a local NGO put up a concept note to the DFID( financial deepening fund) . A few weeks later we recieved mail to the effect that our note was not selected for consideration. In the concept paper, we had proposed to work with Safaricom, faulu, equity bank to test a money transfer system using mobile phone sms technology for people far removed from commercial centres and thus unable to transact.
    One Sunday morning,About seven months later, and to my horror, I read in the Daily Nation that Vodaphone, DFID, Faulu and Equity bank were in 1 billion (kes) joint venture to test money transfer through mobile phones.

    Any laywer out there brave enough to follow this through?

  12. Patroitism? I don't think any kenyan buys anything because of patroitism. And I think mobile money will thrive in any environment, regardless who innovated the concept.

    I think the people who implement ideas deserve the credit. If mpesa had failed, no one would have come forth claiming it was their idea.

    Many of us have briliant ideas, but never implement them.

  13. @mutuku Successful implementers deserve credit - I agree. What's your take on inability to implement resulting from not being the operator of the only feasible network as with the alleged case submitted by @anon-march-02

  14. does anyone out there know how much the UK charged for the MPESA system?

  15. The UK charges the same charge as a normal western union charge.i.e £4.50 for transaction btw £1-100.etc just fill the form and tick the mobile money transfer instead

  16. MPESA is not a kenyan idea. The idea was generated by Sagentia (formerly Scientific Generics) is an international product development and technology consulting organisation.Sagentia's heritage is linked to that of the Cambridge phenomenon: the high technology cluster based around Cambridge University in the UK that emerged in the 1980s. Sagentia was founded by Professor Gordon Edge as Scientific Generics in 1986. Kenya, South Africa and Afghanistan are merely beneficiaries of the idea: Kenya runs the same though SIM toolkit while South Africa through USSD

  17. Mpesa is purely a kenyan idea developed and implemented by opportunists, had the inventor been properly supported much more would have been said about him. Does controversy arise just because its merely a kenya idea?

  18. MPESA is not a Kenyan idea it is only Kenyan since Kenyans saw the opportunity and made use of it . this was a UK based idea from the Cambridge University which sold the Idea to Vodafone partner with Safaricom. So Kenya was a trial base since our banking systems was only for the rich and we had no credit payment systems that's our MPESA come to being in Kenya.


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