Safaricom's M-Pesa has been a well known success story throughout Sub-Saharan Africa, which is an innovative money transfer feature offered by the Kenya's largest mobile network provider. This is an exemplary case, as it is a story about an innovative financial product providing essential financial services to customer segments in the country with litter or no access to banking services through the mobile phone network. Since the service launch in 2007, M-Pesa has improved financial inclusion as it facilitates seamless individual and business transactions through the SMS based mobile payments. The service allows users to transfer money to other users (and non-users), and it enables money transfer between the service and a bank account. From 2011, international money transfer through the service became possible thanks to the strategic partnership between Safaricom and Western Union. As of March 2013, M-Pesa has more than 17 million customers in Kenya (nearly 40% of total population) and it started providing savings and micro-lending products. Will such a new non-bank financial services provider be a game-changer that would make banks' traditional business model obsolete?
Many western financial services providers have enjoyed their market leading positions as trend setters and standard bearers. However, it does not necessarily mean that customers in these places have the most innovative products and services available in the market. In many occasions, customers in the emerging markets, especially in those with rapidly developing ICT infrastructure such as China, Turkey, Malaysia and South Korea, have been able to use more innovative financial products and services than those living in countries like UK and France. Take the case of mobile banking, it was only recently that major UK banks have started providing mobile banking apps that enable customers to make payments and funds transfer as well as the basic services like checking balances and viewing recent transactions while customers in emerging market can use various financial services such as money remittance and paying utility bills through their mobile phones from the late 2000s. How come the customers in developed countries, where all the technologies and innovations are available and all the necessary resources to implement them, have to bear with not using faster and more convenient mobile banking services for such a long time?