Competitive advantage of M-Pesa, is it sustainable?
Date
2015
Authors
King’ori, Gladys Wahito
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Mobile Money Transfer (MMT) is an innovation to transfer money using the
Information and Communications Technology (ICT) infrastructure of the Mobile
Network Operators (MNO). Kenya’s largest MNO, Safaricom, launched an MMT,
M-PESA, an innovative payment service for the unbanked in March 2007. Within
the first month, Safaricom had registered over 20,000 M-PESA customers, well
ahead of the targeted business plan. The growth of M-PESA is faster that the growth
of formal bank accounts. Despite competition with telcos and banks, Safaricom’s MPESA
has accounted for 78.5% of the total number of active mobile money users in
the country. There is therefore some form of competitive advantage that M-PESA is
leveraging to gain market share.
The purpose of this study was to use the Porters Five Forces model to determine the
sustainability of M-PESAs competitive advantage. A descriptive survey design was
employed to achieve the study’s objectives. Data was collected from 185 of the
targeted 240 respondents using questionnaires.
It was found that the main sources of competitive advantage for M-PESA as a MMT
service are: most of the people that use money transfer services in Kenya are on the
M-PESA service, the integration of M-PESA and banks, the minimum adoption
barriers and the simple and transparent pricing.
Analysis the sources of competitive advantage by using the Porters Five Forces
model and regression analysis indicates that M-PESA has a sustainable competitive
advantage as a MMT in Kenya.
The study recommends that M-PESA looks out for new threats like Mobile Virtual
Network Operators (MVNOs) and that future studies to be done with a higher sample
size from the various towns in Kenya for a comprehensive generalization of the
results.
Description
Submitted in partial fulfillment of the requirements for the Degree of Master of Business Administration (MBA)
Keywords
M-pesa, Economy, Competition, Mobile Money Transfer, ICT