Kenyans can from today receive money from any PayPal account across the world directly into their M-PESA accounts in real time.
The development comes after Safaricom and PayPal collaborated to enable PayPal customers in Kenya link their accounts to their M-PESA accounts. This allows them to withdraw their PayPal funds with ease from more than 148,000 M-PESA agents around the country, marking another world first for Kenya’s leading telecommunications services provider.
Before the M-PESA collaboration, PayPal customers had to open accounts with Equity Bank, into which they would transfer their funds before withdrawing them at the bank’s branches or agents. Equity Bank, which recently revised its charges for its Equity PayPal withdrawal service, has an estimated 266 bank branches and 40,000 agents countrywide.
The ability to access PayPal from any mobile phone significantly lowers the barrier to access, heralding a new era in fast, safe and convenient remittances.
Last year, diaspora remittances were Kenya’s highest foreign exchange earner, overtaking tea, coffee, and tourism. Remittances contribute to financial services expansion and drive growth of financial inclusion.
The Central Bank estimates that approximately KES 197 billion was remitted from the diaspora through commercial banks and other authorized international service providers in Kenya in 2017.
The move is seen as Safaricom’s strategy to maintain its position as a preferred mode of receiving remittances. M-PESA began offering International Money Transfer services in 2012, which marked the start of an explosion in remittance growth.
Launched 20 years ago as an online payment platform, PayPal links customers and merchants in more than 200 countries and regions around the world.
The company says it has more than 18 million merchants globally, and that its partnership with M-PESA will open up markets across the world to Kenyan merchants and freelancers.
PayPal is also targeting Kenya’s growing e-commerce sector, which is witnessing a surge in transactions as more of the country’s emerging middle class turn to online shopping as their appetite for convenience grows. The company hopes to grow its local customer base by making it easier for both consumers and merchants to carry out more transactions by making it easy for them to shop and pay online from their M-PESA accounts.