Globalisation of M-Pesa will ease cross-border payments

M-Pesa app

A smartphone user makes use of the M-Pesa app. The app is among the most popular utility apps in the country.

Photo credit: File | Nation Media Group

The recent launch of M-Pesa Global pay Visa virtual card by Safaricom in partnership with VISA will play an important role in linking M-Pesa customers to more opportunities, especially in global e-commerce.

Indeed, the strategic partnership by our two organisations speaks directly to empowerment of over 30 million M-Pesa customers – many of whom may not have a traditional bank account – to shop online globally, and to make seamless and secure payments at more than 100 million merchants in more than 200 countries through Visa’s global network.

This milestone has accelerated a new growth area that builds to M-Pesa’s 15 years of evolvement and innovation from a simple money transfer service to become a robust payment platform enriching digital lifestyles and delivering customer experience, besides driving financial inclusion for Kenyans.

Perhaps the biggest vantage point for globalisation of digital payment systems through M-Pesa Global Pay Virtual Card, is the opportunity to provide services that meet the needs of customers by opening them up to the global market.

As we all can attest, the world is already leaning towards cashless payments. And as the global business continues to expand, so too does the volume of cross-border payments.

Indeed, the levels of consumer expectation have increased exponentially in recent years. Consumers expect every digital experience, regardless of whether it's coming from a bank, a merchant or a FinTech, to all offer the same fast, convenient, seamless payments. They want to be able to shop and pay anywhere, anytime, safely and at a low cost while also being able to spend and send money globally as easily as at home.

Admittedly, the fast-developing e-commerce ecosystem, which includes marketplaces, payment gateways and online logistics, is helping to reduce barriers to trade across borders.

Kenya is one of the largest e-commerce markets on the African continent and is ranked 54th globally, with a revenue of US$2 billion in 2021. It is, therefore, important to ensure elimination of as many barriers as possible to the customer’s experience for e-commerce adoption to continue to grow locally.

Travelling abroad

In addressing some of those barriers, the virtual card is a timely service tailored to meet the increasing needs of Kenyans using global apps and shopping around websites for entertainment, retail, business and even when travelling abroad.

Notably, the virtual card is exclusive for international online payments outside the country to protect customers from incurring forex conversion costs on local online payments, which are billed in Kenya shillings.

In addition to providing customers with the freedom and convenience of transacting across the world through their mobile money wallet, the virtual card also builds on M-Pesa’s security by empowering customers to generate a unique Card Verification Value (CVV) number for 30 minutes. This feature ensures all the details of the card required to perform a transaction are only known to the customer.

As evidenced by increased contactless payments and payments via apps and mobile phones during the Covid-19 pandemic, customers are also becoming more discerning of the power of technology for efficient payment solutions in the e-commerce space. That trend has raised the expectation level significantly and will continue to play a crucial role in driving the adoption and integration of virtual cards into systems moving forward.

The high customer expectation has also paved the way for numerous innovative products, services, and solutions that will help in transforming lives and impacting society. Globally, virtual cards have helped in the alleviation of poverty, the development of productive, empowered citizens, the promotion of business prospects, and the stimulation of economic progress.

Therefore, as sustainable businesses and with the launch of M-Pesa Global Pay Visa Virtual Card, our organisations are committed to expanding the payments environment in Africa, and this partnership is a significant step toward achieving that goal.

We look into the future with optimism and leveraging on strategic partnerships such as this one to provide more solutions.

Mr Ndegwa is Chief Executive Officer, Safaricom; Ms Mbiaketcha is VISA’s Vice-President and General Manager for East Africa.