Standing orders are common in banking services but are very rare in mobile money products such as M-PESA.
Safaricom’s M-PESA is set to introduce standing orders in an announcement revealed by the telco’s CIO George Njuguna. This will effectively make it the first mobile money platform with this feature, although standing orders are quite common in traditional banking and neo-banking products. Through X (formerly Twitter), Njuguna said, “This is the first initiative, where you will have standing orders on a mobile platform – the first in the world, and not just the first in Africa. We will use it in other areas such as health because we understand this economy to increase accessibility and affordability.”
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Standing orders in M-PESA will be a great way to automate recurring payments or transfers. With a standing order, you can set up a regular payment to be made from your mobile money account to another person, business, or service. This can be a convenient way to pay your bills, rent, or other recurring expenses on time and without hassle.
Possible implementation avenues
M-PESA has grown to feature tens of products and services, covering payments, savings, and access to credit. For bill payments, M-PESA runs products such as Lipa na M-PESA and Buy Goods. This is one channel where users will likely be able to set up standing orders to pay for utility bills, rent, and other expenses automatically from their M-PESA accounts, and on specific dates.
M-PESA also runs a number of credit facilities, including M-Shwari, KCB M-PESA, and Fuliza (an overdraft facility). Therefore, this is one area where standing orders will be key to ensure that loan repayments are done on time.
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Standing orders have traditionally been instrumental for savings and investments. Safaricom has similar products, including the aforementioned KCB M-PESA and M-Shwari for savings, as well as Mali, its investment product. It would be interesting to see how standing orders will be integrated with these services, as they can help in transferring part of a customer’s balance into investment or savings regularly.
Last year, Safaricom launched a virtual card in partnership with VISA. The card is solely used for online payments. Kenyan customers can, for instance, pay for Netflix via M-PESA through this channel – and this is another application where standing orders can go a long way in settling payments without manual intervention every other time.
Safaricom has not revealed when standing orders will be accessible to users. Implementation details have also not been disclosed. In the fiscal year ending in March 2023, M-PESA recorded 8.8% growth in revenue, reaching KES 117.19 billion ($816 million). These figures, however, fell short of the results reported in the prior fiscal year. Safaricom attributed this decline to macroeconomic effects.
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