Tens of millions of people using Kenya’s dominant mobile money service M-Pesa will now be able to transfer cash to over a billion active users of China’s digital payment system WeChat Pay. The Nairobi-headquartered Family Bank along with London-based fintech firm SimbaPay launched a service that enables users send money to the users on the WeChat platform, which is owned by Chinese tech giant Tencent.
Individuals and businesses can send funds to China by either downloading Family Bank’s PesaPap app, through M-Pesa, or by dialing a USSD code in Kenya. Non-customers too will also access the service via a dedicated pay bill number on M-PESA. Before transferring the payment, a sender will be able to review the transaction and check exchange rates before its delivered in Chinese yuan.
The service is most likely to be used by Kenyan traders to pay for Chinese goods without using more expensive or slower bank options or traditional money transfer systems or remittance services. This is especially true for small-scale traders who have had to depend on middlemen to order goods and make payments on their behalf.
For the Kenyan telecom operator Safaricom, the availability of its dominant mobile payment service M-Pesa in China solidifies its footing among competitors at home and abroad.
With almost 24 million subscribers, Safaricom has spent the last couple of years experimenting with creating a diverse M-Pesa ecosystem similar to one that WeChat Pay has in China with its 800 million users. This includes an app like WeChat dubbed Bonga which allows M-Pesa users to chat while sending or receiving money. Safaricom also signed a deal to connect its customers with the 227 million users of online payments company PayPal. Last month, M-Pesa mobile wallet accounts were connected to 500,000 global agents representing financial services firm Western Union.
Rather than expanding WeChat Pay abroad with a standalone app, Tencent has focused on signing up foreign merchants so that Chinese traders and tourists could use the platform abroad.