Vodafone M-Pesa has launched a cross-border transfer service between East Africa’s two biggest economies to help funnel the remittances sent by roughly 300,000 Kenyans living in Tanzania.
The move will allow M-Pesa users in Kenya and Tanzania to send money to one another at the same cost as internal transfers.
According to World Bank figures, Tanzania sent approximately TZS 200 billion (around US$109-million) to Kenya through formal channels in 2013, and a similar amount through bus drivers, friends and family. Some Tanzanians have also opted to have their children educated in Kenya, also taking advantage of both formal and informal channels to send money.
“With a substantial unbanked population transacting mainly in cash, the Tanzania-Kenya corridor represents a significant opportunity for M-Pesa to give people and companies an accessible, low-cost alternative to traditional international remittances,” said Michael Joseph, Vodafone director of mobile money.
Vodafone mobile money service M-Pesa will now allow customers in Kenya and Tanzania to send money to one another at the same cost as local transfers. Transferring money internationally through banks or money transfer operators can cost up to 31 per cent of the transaction, while using M-Pesa to transfer $50 over the Tanzania-Kenya would cost around 1 per cent of the transaction, plus a foreign exchange fee.
Those sending money from Tanzania to Kenya, for example, will be shown the equivalent value of the funds being send in Kenyan Shillings, Memeburn reported. The currency conversion will happen immediately. Vodacom claims, and the money will be made instantly available for withdrawal, making bill payments or buying airtime.
Launched in 2007, M-Pesa is now available in Tanzania, Fiji, South Africa, DRC, India, Mozambique, Egypt and Lesotho. Romania became the first European market to gain access to the service in March 2014.
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