Opportunity: Online MPESA Agent?

If you look at the sidebar here on Like Chapaa, you will notice a “Most Popular” section. This lists 10 of the most popular articles, ever, on this website. If you look closely, you will see that FOUR of those 10 most popular articles are talking about How to Receive Money Online in Kenya. What does this mean?

It means that there is a very great amount of interest on how to efficiently and conveniently receive money online in Kenya. This is probably because if you are doing any kind of business online from Kenya, you know that getting the money you earn has been and continues to be terribly difficult. It seems to me that people would jump at anything that would make this easier. It seems to me that there is an amazing opportunity that no one has addressed very well.

What would the ideal solution be?
I have done no sort of extensive research on this but I believe that the ideal solution would be a service that:

  1. Allows people to easily and cheaply transfer their money from services like PayPal, MoneyBookers, AlertPay, etc into a more locally accessible location
  2. The best “more locally accessible location” would be the mobile phone – MPESA, YUcash, or ZAP. SO the ability to transfer your money from akina PayPal into your phone directly.
  3. The whole thing needs to be done to international quality and security standards
  4. The service needs to be VERY transparent
  5. The service needs to exist for, and make us that its primary aim is not just to make money but actually to serve us. Other organisations offering similar services have struck me as being out to ‘make money ruthlessly’ instead of offering good service.

Can anyone build that? I’d be your first customer! I know that several Kenyan establishments are offering services that may come close to what I describe them but the fact that so many people who need this are still looking for a suitable solution means that this “market” is untapped.

Other things
Apart from transferring money from akina PayPal into services like MPESA, I would love the ability to transfer money from akina MPESA directly into services like PayPal.

I’ve been thinking about this a long time (because I feel the pinch and I need this badly) and it just seems so very doable that I wonder why no one has yet stepped up and tried to do it.

What would you need to do this?
As you read this section, keep in mind that I have not done any extensive research into this and what I say may just be plain wrong.

As I stated earlier, I think building such a service is not particularly challenging, at least not technology-wise. Here’s my idea on how it can be built:

  • You need an agreement with one of the Mobile Networks. I feel that Zain is the most approachable of the four Kenyan mobile operators. I remember having good conversations with their engineers on how to more deeply integrate ZAP into DukaPress. The kind of agreement you need from them shouldn’t need to be too different from the agreement that they currently have with ZAP agents. Something similar, but they need to know you will operate online.
  • You need to notify akina PayPal, obviously, that you will be offering this kind of service. Paypal, in particular, has elegant APIs that should make building your service easier.
  • You would need to build your application in such a way that it accepts money from akina PayPal into your registered customers’ accounts securely and then, on demand, transfers that money into your customers’ mobile phones. The good thing with ZAP is that you can send money to any phone network in Kenya.
  • You would, obviously, need to structure your pricing in such a way that you take a small (it has to be small) percentage of the money that passes through your systems as your fees. As you plan this, you need to work around withdrawal fees za akina MPESA as well as the fees due to akina PayPal
  • It would be an extremely good idea to make your whole application work fully from a mobile phone and not just the web!!
  • Your system needs to be secure; it needs to inspire confidence.
  • You need to anticipate the possibility of PayPal partnering with local banks (it is rumored they shall be partnering with Equity). This poses a significant threat to your business. You need to build your application with this in mind and strategize on how you shall deal with it. Which I personally think is very do-able.

So, what do you think? Is this build-able? What do you think of the whole idea? Leave your comments below. 🙂

Additional Resources


  1. The problem is the hardware to handle mpesa input. Unless you get a paybill account

  2. e-pesa.net already does that.

    • Nope, not really. E-Pesa is more of a payment gateway – what I am referring to here is more of a money transfer service. Why use another Gateway when you can use the Internationally acclaimed PayPal??

      Also, in some cases e-pesa charges you a commission of upto 16%. This is excessive, bordering on ludacris. ( http://e-pesa.net/faq.html )

  3. PromulgatedKabisa says:

    I have been thinking about this also. I am not an IT guy so I can’t be of any help, but I am wondering why hasn’t anyone thought of coming up with this application. I think whoever comes up with it stands a good chance of earning some decent money, before the copycats dive in.

  4. Mukuru .com already has a service by the way. They make money through the exchange rate + percentage + a fixed fee.

    My company (a local startup) recently did a feasiblity study on this and, technically, this is something that would take a good programmer only a few days to do.
    However, the issues are more contractual.
    1. You have to sign up to be an MPESA / ZAP agent.
    2.If you are going to accept paypal payments, you will be charged 3.9% of any transaction. At the moment, paypal only allows USD for kenyan accounts. And you cannot withdraw to Kenyan bank accounts. A big obstacle.
    3. If you figure out a way to withdraw your money in US and get it to Kenya, whether automated or manual, expect to lose another 3-6% in transaction fees and terrible exchange rates.

    The most efficient way would be to let your users pay via credit card / debit card and get the transactions processed by a bank local. My understanding is that this is very expensive at the moment.

    I am not sure what’s the commission MPESA agents earn, but I doubt it would be able to cover the costs if this service charges less than 7%.

  5. I came accross the challenge few days ago, before i came accross this post i had madde up my mind that i am building that system. At the moment, i have set the tools down for work and in a few months it will be ready for business. I will keep you posted. I want someone to send money from their paypal or any other online account directly to mpesa. it will be done soon..and am doing it

  6. You should really check out bitcoin. I use it regullary to transfer sums from europe/us to africa.

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