How Michael Joseph made M-Pesa a global mobile money leader despite doubts

Michael Joseph, the first CEO of Safaricom, shared how Vodafone shareholders initially doubted M-Pesa and thought it was a waste of money and effort.

Speaking at M-Pesa's 18th anniversary celebration on Friday, March 7, he explained that despite the opposition, he pushed forward with the idea. His determination paid off, as M-Pesa has grown into a major mobile money service with more than 70 million users worldwide.

Joseph, who was also the former chairperson of the Safaricom Board, recalled that 18 years ago, M-Pesa was dismissed as a 'stupid' idea. "Vodafone shareholders came in at that time and told us that this was a stupid concept and that we were squandering time and money. It cost us a lot of money. However, I declared, 'I will still do it.'"

Over time, M-Pesa gained popularity and now handles nearly 100 million transactions daily. The current CEO of Safaricom, Peter Ndegwa, described M-Pesa as a financial revolution that has transformed the way people access money and conduct business.

"Millions of Kenyans now have access to financial services, allowing them to send and receive money, pay their bills, and obtain credit with never-before-seen simplicity and convenience. In addition to being a technology advancement, M-Pesa was a social revolution that changed how people conducted business, empowered small company owners, and stimulated economic growth," Ndegwa explained.

As M-Pesa continues to grow, Safaricom now manages over 300,000 agents across Kenya. However, this expansion has also increased the company's expenses, especially due to agent commissions.

"Our biggest expense is the commissions paid to the agents.

When you consider this from a commercial standpoint, we make sure they are fairly compensated because they are a component of our infrastructure and we manage M-Pesa independently," said Safaricom’s chief financial services officer, Esther Waititu.

The idea for M-Pesa was first developed by Nick Hughes in 2006 when he was leading Vodafone’s social ventures division, which owned 40% of Safaricom at the time. Hughes later co-founded M-KOPA, a company that provides off-grid "pay-as-you-go" energy solutions.

Today, M-Pesa has over 34 million users in Kenya who conduct billions in transactions daily. In addition to basic money transfers, Safaricom offers other financial services like Fuliza and M-Shwari. Recently, the company introduced M-Pesa Ratiba, a standing order service that helps customers schedule automatic payments for bills and recurring expense