- Money transfers between China and Kenya made easier thanks to a partnership between M-Pesa and WeChat
- London-based fintech firm, SimbaPay, established the link between the two tech giants
Millions of people in Kenya use M-Pesa, a cellphone-based service that offers money transfers, financing and microfinancing. Founded in 2007, M-Pesa has more than 80% of the market share. Similarly, WeChat Pay allows users to facilitate payments through their cellphones. WeChat is owned by Tencent, a Chinese technological giant with a market capitalisation of over $3 trillion. WeChat Pay has more than a billion active users.
The Chinese and Kenyan companies have established a link that allows to send money to China via a number of options. Users can either download Family Bank’s PesaPap and send funds through the application or using M-Pesa. Alternatively, users can dial a USSD code directly from Kenya. The transfer is secure, and the payer can review the transaction details before transferring to the payee. The user can also review the exchange rate before the funds are delivered in yuan (¥) in China.
The benefits of this partnership are multifold. Merchants in Kenya who had to previously rely on slower or more expensive banking channels can now use the service and save time and money. Small-scale traders who had to rely on middlemen to order and pay for goods can now go direct, which saves them costs. Traders will also be able to replace their stock at a faster rate than before due to the reduced payment time.
In 2018, Kenya imported more than $3.6 billion of goods from China. Thus, the need for an efficient payment service is clear. For Safaricom, the company that operates M-Pesa, the linkage provides them with scale and increases their competitive advantage among companies at home and in China.
Read more here: