Standing orders, while standard in banks, has been a rarity in mobile money platforms like M-PESA.
Safaricom’s M-PESA is pioneering with its planned introduction of standing orders, as disclosed by the telco’s CIO, George Njuguna. Through X (previously known as Twitter), Njuguna highlighted, “This groundbreaking move brings standing orders to mobile platforms for the first time globally, not just in Africa. We envision expanding its use to sectors like healthcare, leveraging its potential to bolster accessibility and affordability.”
M-PESA’s new feature will facilitate automated recurring transfers or payments. With standing orders, users can automate payments from their mobile money account to others, simplifying payments for bills, rent, and regular expenditures.
Potential Implementation Scenarios:
M-PESA has diversified, offering a wide array of products, from payments to savings and credit access. For instance, payment systems like Lipa na M-PESA and Buy Goods could allow users to establish standing orders, ensuring timely payments for utilities, rent, and other costs directly from their M-PESA accounts.
Credit services like M-Shwari, KCB M-PESA, and Fuliza (an overdraft service) will likely find standing orders essential for punctual loan repayments.
Historically, standing orders have been pivotal for savings and investments. While Safaricom provides similar services, such as KCB M-PESA, M-Shwari for savings, and Mali for investments, it will be intriguing to see how they integrate standing orders to aid customers in channeling funds into investments or savings routinely.
In the previous year, Safaricom, in alliance with VISA, introduced a virtual card tailored for online payments. Kenyans can, for example, utilize this to pay for services like Netflix via M-PESA, making standing orders a perfect fit to ensure consistent payments without recurrent manual input.
The official release date and detailed workings of the standing orders remain undisclosed by Safaricom. For the fiscal year concluding in March 2023, M-PESA reported a revenue growth of 8.8%, amounting to KES 120.41 billion (approximately $816 million at the previous exchange rate). However, these figures were a bit subdued compared to the earlier fiscal year, with Safaricom attributing the dip to overarching economic factors.
George Njuguna, the CIO of Safaricom, recently disclosed the company’s intent to pioneer the introduction of standing orders to M-PESA, making it the world’s first mobile money service to do so. Sharing the news on X (previously known as Twitter), Njuguna remarked, “This global-first initiative, not just an African milestone, will extend to areas like healthcare, leveraging our in-depth understanding of the economy to enhance accessibility and cost-effectiveness.”
M-PESA users will soon enjoy the ease of automating regular payments, facilitating seamless transfers to individuals, businesses, or services. This addition promises timely payments of bills, rents, and other routine charges without any manual intervention.
Projected Implementation Scenarios:
M-PESA’s expansive range of offerings encompasses payment, saving, and credit options. For instance, with features like Lipa na M-PESA and Buy Goods, users might soon automate utility bill payments or rent directly from their M-PESA balance at pre-set intervals.
On the credit front, M-PESA offers facilities like M-Shwari, KCB M-PESA, and Fuliza. Standing orders could ensure prompt loan repayments here. Moreover, standing orders have been fundamental in the savings and investments realm. Safaricom’s savings solutions like KCB M-PESA, M-Shwari, and its investment tool, Mali, could be enhanced by automatically diverting funds for savings or investments.
Furthermore, Safaricom’s virtual card collaboration with VISA, aimed at online payments, presents another arena for standing order utility. For example, Kenyans can pay their Netflix subscriptions via M-PESA, and standing orders could further simplify such periodic payments.
Although Safaricom hasn’t yet specified the launch date or detailed mechanics of the standing orders feature, the last fiscal year saw M-PESA’s revenue climb by 8.8%, amounting to KES 117.19 billion ($816 million). Yet, this growth was slightly subdued compared to the previous year, a shift Safaricom attributes to broader economic influences.