Mobile Money has come a long way in the last few years. Kenyan mobile network operator, Safaricom, introduced their MPESA service 4 years ago in 2007 and the service literally took off, setting the stage for quite the revolution. Safaricom’s MPESA is today the most successful mobile money operation all over the world, and their numbers definitely prove it.

There have been attempts to transplant this success elsewhere with varying degrees of success. Other mobile operators soon caught on both within Kenya and across the continent. The attempt to implement MPESA in the South African market did not go as well as would have been expected and Nigeria has massive potential for mobile money.

Well, looking at Kenya mobile money is creating breakthrough after breakthrough. One particular area of interest that mobile money is now providing a solution to is that of online payments. There are two aspects here really – local and international online payments.

Local Payments

Many e-commerce websites in Kenya have been able to integrate mobile money into their website such that people can pay by either MPESA or Airtel Money or some of the other mobile money services.

Of even more interest here has been the rise of payment gateways that make it easy for merchants to integrate mobile money and on the other hand also make the process easier for customers. One provider of note is PesaPal, which is really what you might consider Kenya’s PayPal. One can open a buyer account or a merchant account on the service really simply, after which you link your MPESA or Airtel Money account. From there as a consumer you can make payments on any website providing PesaPal as a means of receiving payments. A buyer can also maintain PesaPal credit in their account that they can use any time online. A merchant on the other hand can receive payments in their PesaPal account and then transfer that money to their bank account at any time. PesaPal has also managed to create a really simple, self-service style integration model.

International Payments

This is where the bigger challenge is. PayPal is not an option for the vast majority of Kenyans and so are credit cards. There have however been some great advances in mobile money that make it much easier to pay online. Both Safaricom and Airtel have introduced some revolutionary services within the course of this year that address the area of online payments, effectively bridging the gap between one’s mobile wallet and checking out online (internationally).

Safaricom – I&M M-Pesa Prepay Visa Safari Card

In February this year, Safaricom partnered with I&M bank to provide a prepaid VISA card that one could load via their MPESA account. According to the Safaricom product page:

[The card] is an international PrePay VISA card that needs to be pre-loaded with funds, in Kenya Shillings, that can be used to withdraw cash in any currency from over 1.6 million Visa ATMs worldwide as well as to make purchases at over 28 million VISA branded shops and other merchant outlets worldwide.

The M-PESA Prepay Safari Card can be subsequently reloaded for continued usage through M-PESA and residual balances can also be refunded at any I&M Bank branch.

The only catch with this solution is that it is still a card based solution so one would need to get the Safari Card from Safaricom outlets  or I&M bank branches… and this is what makes Airtel Money’s recent announcement even more awesome…

Airtel – StanChart - MasterCard Virtual Prepaid Debit Card

This is a very recent announcement from Airtel that is really quite innovative and a first of it’s kind. Airtel, in conjunction with MasterCard and Standard Chartered Bank have partnered to provide a literally card-less solution dubbed PayOnline! Basically, you hold your money in your Airtel Money account, you do not need a card at all, instead, at the point of purchase you get a one time card number that is valid for that transaction only - how cool is that! From the press release:

Airtel Africa, Standard Chartered Bank and MasterCard Worldwide have announced the availability of the world’s first virtual payments card that operates off a mobile phone-based wallet in Kenya called PayOnline. Kenya is the first market in the world to make this type of payment solution publicly available, which lets Airtel Money customers in Kenya use their mobile phones to make online purchases from international MasterCard merchants around the world….

With PayOnline, paying for an online purchase is quick and easy. People simply request a single-use shopping card number directly from their mobile phone’s menu of options. Airtel money services will then generate a special 16-digit number that enables the completion of the purchase. Once the purchase has been authorised, a confirmation message will be sent to the user’s mobile phone.

A single-use number assigned to each PayOnline purchase must be used for the first time within 24 hours, which offers increased security and protection to prevent unlawful access to people’s money. Transactions will initially be limited to Kes. 35,000.00 per transaction and Kes. 70,000.00 per day. However, theselimits can be changed in the months to come – dependent on demand.

People can purchase items online which are quoted in Euro, USD or Pound, and will be charged a fixed transaction fee of Kes.50.00 for each “PayOnline” number generated. This fee will be deducted from the customer’s Airtel Money account. “The connected world is shrinking at a rapid pace as people turn to mobile phones to connect with friends and make purchases on-the-go.

Not only is this super convenient. But you can imagine how this approach is a much easier logistical and financial burden for Airtel – they are not printing or distributing any cards, the entire operation is technology based. Below is a video of how this works:

Airtel Getting their Innovation Game On

This interesting innovative development from Airtel is quite something. The now Airtel operation has been through quite a metamorphosis. It started as KenCell Kenya, and really had first to market advantage but over a series of acquisitions each with a new name (KenCell,Celtel, Zain, and eventually Airtel) the brand suffered a lot as Kenyans perceived it sort of an unstable brand whearas Safaricom has always been, well, just Safaricom!

However, it seems Airtel is here to stay and the organization is really taking it to Safaricom. It all started with their bullying Safaricom into a price war that saw tariffs come down dramatically, relentless and guerilla-like advertising asaults and simply not letting up.

Airtel might have a long way to topple Kenya’s mammoth mobile operator, but it would appear that they are going to give it all they’ve got. And the market-leading innovation as exemplified in the virtual debit card is really a breadth of fresh air.