An exploratory study on the usage of M-payments by small and medium business enterprises in Kenya

Abstract

The aim of this study was to identify the key aspects of the currently available m-Commerce systems, and, in particular, identify what the drivers were for a successful implementation. The study was to look at the technology, market & competition, regulatory and network load issues with a view to explore on the usage of m-payments by small and medium business enterprises in Kenya. This study has necessarily taken a high-level look at the emerging second hand clothing industry imitumba businesses) and in the process has identified the difficult issues that will impact the success of new implementations, such as m-commerce, in the African market(s). The rapid spread of mobile phones means that the number of mobile users may exceed the number of banked people in many low income countries. Mobile phones can also offer a communications channel for initiating and executing on-line financial transactions. This channel may not only reduce the cost of financial transactions for provider and customer, but also allow new entrants to the financial sector, and new relationships to be formed for distributing services. These changes hold the prospect of accelerating access to financial services on the back of the mobile infrastructure. This research investigates the extent to which the expansion of mobile telephony is likely to lead to the expansion of access to appropriate financial services in developing countries, especially Africa. The objectives of this study are to determine how the current m-payment habits are being perceived by entrepreneurs in Kenya, to establish whether reaching the small and medium business entrepreneurs through m-payments will be the ultimate driver towards an entrepreneurship boom in Kenya and to determine which business model can support m-payments for online transactions. The researcher of this paper acquired data for analysis in order to, firstly, find out how the current m-payments habits are being perceived by entrepreneurs in Kenya. Therefore, she conducted a survey through questionnaires to evaluate feasibility of the Bottom of the Pyramid (BOP) population doing transactions through m-payments. The study discovered that small businesses are using money transfer systems for transactions, and this has lead to the rapid growth of establishments and low cost of operations for small businesses. It was concluded that the usage of mobile payment systems shall lead to an explosion of small business set-ups in Kenya and Africa at large.