Vodafone and Safaricom began a pilot of a mobile phone-based money transfer service in Kenya. The pilot helped test how people would convert cash into electronic value through local agents and send it by phone. This early trial set the foundation for a national rollout aimed at customers without bank accounts.
Safaricom launched M-Pesa nationally in Kenya, offering person-to-person transfers using basic mobile phones and a network of agents who handled cash-in and cash-out. The service quickly became a practical alternative to carrying cash or using bank branches that were often far away. This launch is widely treated as the start of modern large-scale mobile money in East Africa.
Vodacom introduced M-Pesa in Tanzania, extending the model beyond Kenya. Early adoption was slower than in Kenya, highlighting that local market conditions—such as agent incentives, competition, and customer trust—strongly affected results. Even so, Tanzania became a key second market that helped mobile money spread through East Africa.
Within about 14 months, M-Pesa had grown to roughly 2.7 million users and nearly 3,000 agents in Kenya. This showed that the agent network model could scale quickly and bring financial services closer to neighborhoods and small towns. The fast growth also made M-Pesa a reference point for other mobile operators in the region.
Survey findings reported by FSD Kenya indicated that by 2009, M-Pesa was used by a large share of Kenyan adults for money transfers. The same evidence linked mobile money to a major rise in domestic remittances between 2006 and 2009. This period marked the shift from a new product to a widely used national payment method.
Safaricom and Equity Bank launched M-Kesho to link M-Pesa with an interest-earning bank account. The product aimed to move beyond simple transfers into savings and other bank services, using the mobile channel to reach rural customers. It also reflected growing cooperation between telecoms and banks around mobile money.
Western Union announced a partnership enabling international transfers into Safaricom M-Pesa wallets. This connected Kenya’s mobile money users to a major global remittance network. It also showed how mobile wallets could become part of cross-border payments, not only domestic transfers.
Safaricom and Commercial Bank of Africa (CBA) launched M-Shwari, a mobile savings and loan product built on top of M-Pesa. It allowed customers to save small amounts and request short-term loans through their phones. This helped push mobile money from payments into broader digital financial services like savings and credit.
Safaricom introduced Lipa na M-Pesa to support payments from customers to businesses, including small and medium-sized enterprises. This expanded M-Pesa’s role from sending money between people to paying at shops and for services. Merchant payments helped deepen the “cash-lite” (less cash) economy by making everyday transactions possible through phones.
Kenya published National Payment System Regulations under the National Payment System Act, setting clearer rules for payment service providers. The regulations covered areas like licensing, governance, recordkeeping, and compliance requirements. This regulatory step mattered because mobile money had become system-wide infrastructure and needed formal oversight.
Safaricom and Vodacom enabled direct M-Pesa transfers between Kenya and Tanzania. This connected two of the region’s biggest mobile money markets and supported trade, travel, and family remittances across borders. It was an important move toward regional payment links within the East African Community.
Tanzania published regulations for electronic money that addressed licensing expectations and the use of trust or special accounts to safeguard customer funds. This helped standardize how mobile money providers should manage e-money and protect users. By late 2015, mobile money in East Africa had shifted from early experiments to a regulated part of national payment systems.
M-Pesa and the Spread of Mobile Money Platforms in East Africa (2007-2015)