Safaricom, PayPal, and TransferTo have collaborated on a deal that will allow Kenyans to receive money from any PayPal account in the world directly to their M-Pesa account in real-time.
The new service allows users to link their PayPal accounts to their M-Pesa accounts enabling seamless deposits and withdrawals.
“M-PESA’s collaboration with PayPal will open up global marketplaces and the global economy to millions of Kenyan and Kenyan-based businesses and individuals. Beyond money transfers, this development ushers in a new era of speed and convenience beyond borders, as we work towards innovating robust platforms through which more entrepreneurs and consumers can benefit from the growing eCommerce industry”, said Joseph Ogutu, Director – Strategy, Safaricom.
Previously, PayPal users could only withdraw funds through their Equity bank accounts. Now, users have the other option of using M-Pesa.
Recently, Equity Bank reviewed its withdrawal charges and it reduced the waiting transaction period from 8 days to 3 days. The new service will increase convenience since users can now receive money straight to their mobile phones.
The deposit and withdrawal of money between M-Pesa and PayPal will be enabled by TransferTo, a “Cross-Border Mobile Payments Network which interconnects financial institutions and digital financial service providers globally to facilitate real-time international mobile airtime top-ups and money transfers to and from emerging markets – all through one single API connection and one global compliance framework.”
“We are proud to have been chosen by these two world-class payments providers to bridge the gap between the services offered in developed countries with those available in emerging markets – which is the cornerstone of TransferTo’s mission,” said Peter De Caluwe, CEO at TransferTo.
Increasing the Flow of Remittances
Safaricom’s partnership with PayPal is a strategy to maintain its platform as the preferred mode of receiving remittances. The firm started providing international money transfer services in 2012 which propelled the growth of remittances. According to the Central Bank of Kenya, about Sh197 billion was remitted from the diaspora via commercial banks and other licensed international money platforms in 2017.
PayPal, which has over 18 million merchants in the world, is targeting the growing e-commerce sector as online shopping continues to attract the Kenyan middle-class population.
“PayPal’s collaboration with M-PESA is part of the company’s long-term strategy to enable e-commerce and democratise financial services on the African continent,” says Efi Dahan, PayPal General Manager for the Middle East, Africa, and Russia.
