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M-Pesa and Nick Hughes


Economics, Marketing

Authors / Editors

Duke, L;Chandy R


Publication Year



It was February 2009, and Nick Hughes, head of Global Payment Solutions at Vodafone, contemplated his notes as he waited to enter the company’s Executive Meeting at its headquarters in Newbury, amid the Berkshire countryside outside London. M-PESA (M for mobile, Pesa meaning ‘money’ in Swahili), Vodafone’s mobile money payments service- had grown exponentially the previous two years; far beyond he or anyone else had imagined. What had begun as a corporate social responsibility project was now a much heralded story of financial innovation, offering financial services to millions of ‘unbanked’ customers. Safaricom, Vodafone’s Kenyan affiliate, planned to increase the range of services developing beyond payments into other financial products, while the M-Pesa service had been rolled out to Tanzania and Afghanistan, where it was gaining momentum. Vodafone had multiple options as to what to do next with M-PESA. They could further tap the three country markets in which they were currently offering the service, for example by creating new services or expanding their customer base within these markets. Or they could develop new markets, by launching the core M-PESA service in other countries. The success in Kenya suggested that further roll-outs were attractive but where? Vodafone’s existing business footprint was expanding but was not extensive and focused mainly on Europe rather than in developing countries. Regulation was a stumbling block in some markets; India being one example where regulators had ruled that only licensed banks could issue ‘electronic money’. Some Vodafone executives were suggesting that the services could be introduced in Europe, Vodafone’s home region, where it had a direct customer base of over 100 million existing customers. This, though, would fundamentally change the nature of the service from one targeting the unbanked. Alternatively, as a non-core business stream, Vodafone could spin off the service.

Topic List

Developing countries, Emerging markets, Entrepreneurs, Innovation, Marketing strategy


Mobile communications

LBS Case Number




Available on ECCH


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