M-Pesa is celebrating 5 years since its launch in Kenya (launched on 6th March 2007). The service has grown with leaps and bounds with the service now handling an average of close to $10 Billion in one single year. The number of Safaricom clients registered and actively using the service is now around 15 Million while more than 10 Million Tanzanians are using it with thousand others using the service in South Africa and Afghanistan.

The sad part of this is that M-Pesa is still too foreign and none of the Kenyan leaders are thinking of the value M-Pesa is to the country and why they must take measures to secure it. I believe that with the growth of M-Pesa, there are areas it has not grown. User experience is almost the same and regular update to continue wooing the users is lacking. This is because the owners of M-Pesa, Vodafone, are very mean with the system locking all creative brains outside.

These are some of my suggestions to the Kenyan government, Safaricom and M-Pesa owners to improve the system.

1. Kenyan Government Should Buy M-Pesa and Own the Innovation

It is sad that five years since M-Pesa was introduced in the country, it is still owned by Vodafone while the whole M-Pesa system is hosted in Germany. Hosting of the system in Germany has brought periodic problems with users suffering whenever a connection is lost between the two countries. Hosting the system will be a great start but the government of Kenya owning the system by buying it fully from Vodafone will just be safe for both the country and the users.

Vodafone earns over Ksh 2 billion (7% of M-Pesa revenues) every year in M-Pesa “license fees”. It is not really clear how this is determined but there are some reports that Vodafone wants the fee adjusted upwards. M-Pesa handles more than 20% of Kenya’s GDP. It is sad that Kenyan leaders see no value in having the country own the system which is so important to the economy.

We only pray that one day the leaders will see the sense.

2. The System should move to be more electronic

Yes the M-Pesa system is electronic. The painful truth is that the over 35,000 M-Pesa agents still hold a trove of offline data which politicians, marketers or just data miners find useful and will be able to readily abuse. There were these reports of M-Pesa data being sold to politicians in January. Such claims are not further from the truth. It would be great if Safaricom would insist on the over 35,000 agents investing on portable systems which can either read fingerprints and enable transfers or can allow for electronic signatures so as to eliminate paper totally.

If Western Union and Money Gram are electronic to the extent they are, why can’t M-Pesa be better? I believe that M-Pesa can beat Western Union and Money Gram in being the first fully electronic system because M-Pesa relies on a unique identifier for the users, the mobile phone number. This might help eliminate the need for records by the sender, agent and receiver as all receive electronic confirmation of the transaction.

3. M-Pesa need to be network independent

However much I believe that the other network operators are just lazy and not ready to push the boundaries to effectively compete with Safaricom, I still harbour strong belief that Safaricom might earn more money if they fully owned the M-Pesa system and sold it to operators all over the world. The system would earn Safaricom money locally and abroad.

The revenue from M-Pesa in such an arrangement would be much more than that which it will get from the few millions of clients it believes it has to retain locally by exclusively owning the platform. The network operators would just be partners just like KCB, Posta, Cooperative Bank and Eco Bank among others are local partners of Western Union.

4. Make M-Pesa a Great Platform it Should be

M-Pesa is a network which has grown and got accepted by the millions just like Facebook. Unlike Facebook though, M-Pesa fails on the need for it to become a platform where all needs are served by different interest groups building apps which rides on the system but uses only the payment system or in some instances the great number of clients from different regions.

This fete can only be achieved if M-Pesa opened up its system to developers. It is sad that even the banking system like KCB connect and all the Pay Bill systems by different business are not real-time but require human intervention and manual activation. It is sad also that even Safaricom’s own post-paid Pay Bill system has to rely on a human intervention for the accounts to be updated. You always wonder why some Pay Bill systems tell you to wait for up to 48 hours, this is because of the human intervention.

5. Where is M-Pesa 2.0 ?

M-Pesa needs to move from a USSD dependent system to a seamless technology which can even use web to process payment. It would be great to have a Facebook app like this PayPal app, Android, iOS and Windows apps which can allow account management just like the apps by Paypal and others on the respective platforms.

Social media platforms like Facebook are the next frontier battles for payment solutions. M-Pesa needs to be there and exploit these effectively.

It would also be great to see Safaricom, Vodafone or the eventual owners of M-Pesa partner with OEM manufacturers like Samsung, LG, Huawei, Ericsson and Nokia to have Near Field Communications (NFC) supported on M-Pesa. We have had a Facebook phone, it will not be a bad idea to have an M-Pesa focused phone.

6. Allow for Cross Border Payment Processing

It is really funny and sickening to rely on Western Union the moment I want to send money to an M-Pesa user in Tanzania. M-Pesa should push for recognition by the emerging markets governments to allow for cross border transfer. Relying on a system which is primitive than it for this is M-Pesa’s biggest drawback.

The platform beats Western Union on many fronts except for a few. Why should it then rely on it for country to country transfer? Because the western governments pushed to have their system recognised while African countries put roadblocks on the path of M-Pesa’s adoption as an international payment system. SAD!!

What do you think?