What Is M-Pesa & How It Works

Here on Mpesa Guide, we will teach you everything you need to know about how to use the mobile money system to send and receive funds.

What Is M-Pesa?

M-Pesa is a leading and most successful mobile money service in Africa. M-Pesa provides financial services to millions of Africans who have a mobile phone but either do not have a bank account or only have limited access to the bank.

M-Pesa is a safe, affordable, and secure way to make transactions on your phone.

Believe it or not, M-Pesa is the best financial service ever to come to the African market.

Read also: How To Reverse Mpesa Transactions.

What Can You Do With M-Pesa?

Here are some of the basic things you can do with M-Pesa:

• Send money
• Receive money
• Pay your bills
• Top-up airtime
• Receive salaries
• Get a short term loan
• Manage your finances on your phone
• Pay salaries/wages

M-Pesa is a safe, simple, and affordable way to store money on your phone.

You can get access to M-Pesa by activating the Mpesa mobile wallet on your phone.

Once you have activated your Mpesa wallet, you need to deposit money into your wallet.

As soon you deposit money into your wallet, you will be able to send funds from your M-Pesa mobile account on any network and anytime at your convenience.

M-Pesa is a recently developed form of mobile money transfer.

Related article: How To Change Mpesa Registration Details.

Why M-Pesa was Invented?

The main idea of inventing this mobile money system is to help people send and receive funds more easily and quickly from any mobile device.

Here is the anatomy of M-Pesa:

The name is a combination of English and Swahili words. M stands for Mobile, and Pesa is a Swahili word which means money. So in simple terms, M-Pesa means mobile money.

The inventors of this financial service, Nick Huges and Susie Lonie had economic freedom and easy accessibility in mind when they were creating M-Pesa.

This is because most people live several miles away from the closest bank.

Moreso, they do not have internet access to enable them to utilize any internet banking service should it even exist with their bank.

To add salt to injury, the requirements of these banks put many people off the banking hall.

The introduction of the M-Pesa payment system has revolutionized the way money flows to both individuals and businesses.

This idea earned them the Economist’s Innovation Award.

They really deserved it because M-Pesa is a life changer in Africa and most parts of the world.

Check out this: How To Update Safaricom M-Pesa Menu Not Working.

How Does M-Pesa Work Technically?

Here is how M-Pesa works in simple terms; It is a banking system that uses the USSD feature on a SIM card.

Once the Sim of your mobile operator has been inserted into the card slot of your mobile device, you are ready to start using the service. M-Pesa works by using the SMS system.

Meaning, you will use SMS messages to transfer money and make payments to vendors as well as family and friends.

Even if you do not have an active bank account, you can register and access all the M-Pesa outlets across the country.

Another thing to note about the mode of operation is that Mpesa uses phone numbers as the user’s account number.

That is, clearly, how Mpesa works.

If you want to store funds in your M-Pesa account, you need to go to the M-Pesa agent for him or her to load your money into your wallet.

Safaricom then saves all the cash collected from depositors in actual bank accounts.

Whenever you make a transaction on the system, M-Pesa gives you a receipt of proof of transaction within seconds, indicating the details of the transaction.

For example, if someone sent 2000 Kenyan shillings to your account, you will get a notification of precisely the amount that was deposited to your account (Ksh 2000), including the date, time, and name of the person who sent you the money.

The sender of the fund will also receive a notification indicating the very details of the transaction.

Read this too: How To Fuliza Mpesa For Instant Loan.

How Do You Use The Service?

For you to use M-Pesa, you need to register at an outlet. After that, you must load your wallet with money to enable you to send money from your account.

The recipient of the money can withdraw it from any of the numerous outlets.

You will agree with me that M-Pesa has helped small, rural economies since it is mobile, fast, and secure.

It provides faster and safer access to funds in communities that are distant away from the banks.

Since the system is cashless, it becomes a more reliable way to carry money than holding physical cash or credit card.

Granted that M-Pesa is not a perfect mobile money system in the world, it is arguably the most successful.

Why the wait?

Register now!