M-PESA Invests $2 Million In Shared Service Operations Centre Remittances Play a Powerful Role in Consumers’ Financial Planning

Safaricom PLC has launched the M-Pesa Africa Shared Service Operations Centre (SSOC) hosted Nairobi, to oversee service operations and technical support for 5 African markets.

The M-Pesa Africa SSOC will oversee service operations and technical support including incident monitoring and resolution, managing platform changes and upgrades, deployment of new features and capacity management, and coordination with technical vendors.

“For 16 years, M-Pesa has been at the core of our purpose to transform lives by using technology to connect customers to different opportunities.

The M-Pesa Africa SSOC builds on our purpose by enabling us to deliver a higher service quality and increased platform reliability as we expand to more markets and add more products to the platform,” said Peter Ndegwa, the CEO at Safaricom.

The M-Pesa SSOC will support M-Pesa operations in Tanzania, the Democratic Republic of Congo, Mozambique, Lesotho, Ghana as well as future markets the service expands to. M-Pesa platform operations in the five markets were previously being handled across several points in Africa and Europe and the SSOC brings the entire platform in-house to a single point in Kenya for the first time.

“Financial services remain a priority for us as we drive financial and digital inclusion on the continent. The launch of this Operations Centre is an important milestone and testament to our commitment to continue delivering innovative and cost-effective personal finance and business solutions that were previously difficult and cumbersome to acquire – further supporting us in connecting the next 100 million African customers,” said Shameel Joosub, CEO, Vodacom Group.

M-Pesa Africa has invested more than $2 million into the SSOC and is part of the company’s transition to a digital cloud-based platform. The new M-Pesa platform is designed to be scalable and offer the entire range of products and services across all markets, support integration of new products and services as well as leveraging emerging technologies in areas such as Big Data and Artificial Intelligence.

“We are delighted to launch the M-Pesa Africa Shared Service Operations Centre which empowers us to provide 24/7 monitoring and support to operations and services across different markets. The Shared Service Operations Centre strengthens our position as Africa’s largest fintech and digital ecosystem, bringing us closer to our vision of one M-Pesa, providing one platform and unified operations across all our markets. It will enable us to deliver increased reliability, a more robust platform, faster upgrade and change management as we transition to a fully digital ecosystem connecting customers and businesses across the continent,” said Sitoyo Lopokoiyit, MD, M-Pesa Africa.

As global populations navigate macroeconomic headwinds, consumers expect remittances to play an even stronger role in their current and future financial planning. According to Western Union’s inaugural Global Money Transfer Index, 64 per cent of global money transfer consumers send and/or receive money once a month or more. Over the next 12 months, 75 per cent expect these remittances to increase.

The Global Money Transfer Index asks consumers how, when, and why they use international money transfer capabilities today, as well as their expectations for tomorrow. Surveying 30,600 consumers in 20 countries across the Middle East, Africa, and Asia Pacific, it is the largest consumer research published by a money transfer operator. The results bolster Western Union’s ‘Evolve 25’ strategy to combine high-value, accessible retail, and digital financial services for all.

Focus on Africa

In Africa, five key markets were surveyed. These are South Africa, Kenya, Nigeria, Senegal, and Morocco.

According to the findings, most of Africa’s consumers (62 per cent) receive money transfers at least once a month or more. Fifty-nine percent send funds across borders at the same rate. Over the next 12 months, more than threequarters of Africa’s receivers (78 per cent) expect these remittances to increase.

The Global Money Transfer Index shows that economic challenges such as higher global cost of living mean 81 per cent of receiving consumers (compared to 79 per cent globally) across the African continent are asking senders for more money. For the same reason, 72 per cent of African senders (71 per cent, globally) agree they are sending more than previously. This may contribute to why consumers state frequency and volume of remittances are primarily influenced by family requirements, despite common perception that remittances are driven by when salaries are received.

“The Index tells us that the cost-ofliving squeeze across Africa means consumers are relying on money transfers as their daily lives have become more challenging,” said Mohamed Touhami el Ouazzani, Head of Africa at Western Union. “As consumers tell us that the remittances they receive will need to increase, it is imperative for money transfer providers to stay agile, and support consumers on their journey.”

While family support is identified as the main purpose for remitting, consumers say transfers also play a strong role in future financial planning. Paying for education costs ranks second highest as a reason consumers remit money. Supporting business interests at home and saving for the future are cited by consumers as critical reasons too.

Maximizing opportunity during times of instability

Consumers also demonstrate that they keep a sharp eye on how their local currency performs back home. In a bid to maximise on opportunity, 67 per cent of consumers in Africa (68 per cent, globally) send more money when the currency value falls in their receiving country. Sixty-five percent of receivers across the region agree that when currency values fall, they receive more money.

Currency fluctuations are front-of-mind for consumers. When asked about the future, 84 per cent (79 per cent, globally) of senders want money transfer brands to offer an additional service notifying them when relevant currency values begin to shift so they can plan transfers accordingly. Achieving better service and greater value also reflects in how consumers determine which money transfer brands to use. Criteria such as achieving the best exchange rate, ensuring lowest or no charges paid by receivers and speed of transfers sit in the top three.

Digital today, choice tomorrow

Industry research shows that there are over five billion internet users in the world today, growing at an annual rate of 1.9 per cent. This growth rate is even higher in developing economies. In sync with this, the Index highlights that over half (58 per cent) of Africa’s consumers want to use digital-only solutions for their money movement needs. However, three billion people remain unconnected, so there is much more to do to achieve true digital equity. Of those who choose not to use digital transfer services at all, trust and customer experience are identified as top barriers—along with a preference to seek face-to-face interaction—among both senders and receivers.

When consumers look to the future, however, the picture changes. Almost half, 49 per cent of consumers in Africa (52 per cent, globally), want a choice in platforms when transferring or collecting. Bridging the digital with in-person experiences will significantly broaden the consumer financial ecosystem.

“Combining digital and physical experiences is the power behind Western Union’s strategy,” said Ouazzani. “If we want to maximise financial inclusion, we must offer consumers diverse options when moving money. This is vital if we want to create long-lasting relationships with consumers and make meaningful impact in communities.”

Innovation sits high on consumers’ agenda

Consumer preferences will continue to spur innovation within the financial services industry. When asked how they would like remittances to evolve, the focus is on advances that will enable even greater convenience, better planning, and inclusivity.

74 per cent of senders and receivers across Africa are frustrated with repetitive and time-consuming paperwork (72 per cent, globally). In fact, 83 per cent of senders in Africa (79 per cent, globally) would prefer facial recognition/biometric technology for instant and reliable registration. Seventy-eight percent of receivers in Africa also want their funds to be disbursed on a prepaid card or e-wallet that does not require a bank account, as well as the option of receiving in different currencies (90 per cent). 85 per cent of all consumers surveyed in the region are also eager for integrated ‘super’ apps, allowing them to manage remittances alongside other financial products with ease.

ARTICLE by MICHAEL MICHIE