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Three Keys to M-PESA’s Success: Branding, Channel Management and Pricing

M-PESA, a mobile-phone based electronic payments system, has been adopted by 8.5 million Kenyans in the relatively short span of 2½ years. Surveys of users show it is a highly valued service, and Safaricom continues to expand the range of applications it can be used for. This paper by Ignacio Mas explores how Safaricom, the mobile operator that commercializes M-PESA, managed to create enough traction with both customers and retail stores, building trust and overcoming the adverse network effects that afflict new payments systems. We focus on three key aspects of M-PESA’s success: (i) creating awareness and building trust through branding; (ii) creating a consistent user experience while building an extensive channel of retail agents offering cash in/cash out services; and (iii) a customer pricing and agent commission structure that focus on key drivers of customer willingness to pay and incentivized early adoption.

Ignacio Mas
Ignacio Mas is a Senior Fellow at CEME at the Fletcher School. He has been deputy director at the Bill & Melinda Gates Foundation, has held senior telecoms jobs at Vodafone and Intel, and has been adjunct professor at the Business School at the University of Chicago. He holds a SB degree from MIT and a PhD from Harvard.

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