Transactions at the intersection where the formal meets the informal economy

mPesa for utility bill advertisement, Nairobi, Kenya 31 August 2010

Taking the basic premise of my previous post one step further, this billboard is a good example of doing business in the “wholly new operating environment” that overlaps the formal and informal (prepaid) economy.

As our taxi driver explained, he preferred not to keep large sums on him at the end of the day and put the money away almost daily (unless it hadn’t been a particularly good day for business) into his mPesa or mKesho accounts. While he banked with Equity Bank, the timings of their branches rarely suited him but mPesa agents were always accessible. Similarly, customers might choose to pay him using this method if they didn’t happen to have cash money in their pocket but had an accumulated balance in their mPesa accounts. You could conceivably say that the service/handset combination was becoming more of a debit card in its usage pattern but with far greater flexibility in timing, frequency and amounts of deposit and withdrawal than a traditional bank issued version.

Now, even if you didn’t have a bank account or a regular paycheck, you could pay your periodic water bill if you had accumulated enough in your mPesa balance by the due date.

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