
Is M-Pesa Kenyan or British? (2017) - severine
https://www.iafrikan.com/2017/12/04/m-pesas-origins/
======
dmurray
It's interesting how SIM hijacking is a serious attack vector for the likes of
Twitter, and every month brings a front-page HN article on how SMS is
worthless as a form of 2FA, yet in more corrupt and lawless parts of East
Africa the phone companies can secure an entire banking system based on
phones.

~~~
pgeorgi
The two use cases (2FA via SMS and M-Pesa) have different threat models and
use different parts of the technology stack.

2FA via SMS requires a private channel, but SMS wasn't built to be end-to-end
encrypted (although it could be, using the SIM's processor, such a proposal
will be shot down by the state actor members of the relevant standards body.
See the less-than-perfect security profile of 5G), and so whenever a message
is diverted within the system, somebody else can take over.

M-Pesa requires message to be trustworthy, and the SIM app can sign them with
a key that resides only on the chip. The transactions are probably not very
private (so it might be possible for an eavesdropper to figure out that user A
sent X currency units to user B) but that's not a make-or-break requirement
for the system to do its job (unlike for 2FA via SMS).

~~~
Thorrez
What if you lose your phone? Is there some sort of recovery mechanism to get
your money?

If so, wouldn't it be possible for criminals to social engineer this recovery
process, similar to how they use social engineering to steal numbers in the
US?

~~~
deesep
If you loose your phone then you must walk in to the nearest office of your
mobile phone network provider. And there are many across the country (Ghana).
No one can do it on your behalf, and you can't do it over the phone or online.
You have to physically go to their office with with a valid ID to recover your
SIM card.

Even if you don't get to recover your SIM card early enough, anyone with
access to your phone must know your wallet PIN code to be able to make
transactions

------
LatteLazy
"Kenyan" and "British" are poorly defined categories. They are not mutually
exclusive. M-Pesa is a large and complex thing (company, product, service,
cultural or economic effect, why not all of those things!)

So the answer is null.

And since people get so hung up on bs about categories, they will argue about
it from an emotional instead of a rational perspective. Those arguments will
be endless as (see first paragraph) there is no correct or provable answer.

It is important to do this analysis and remind ourselves of these facts
whenever a poorly defined question arises involving complex systems (like
culture, society, economics or politics).

~~~
geekpowa
M-Pesa was a foreign commercial product.

Even server infrastructure was hosted offshore until relatively recently[1]

[1] [https://cointelegraph.com/news/m-pesa-shuts-down-as-they-
mov...](https://cointelegraph.com/news/m-pesa-shuts-down-as-they-move-servers-
from-germany-to-kenya)

------
geekpowa
G-Cash, in the Philippines, was the first mobile based money transfer
platform. It was launched in October 2004, a year before M-Pesa.

There have been many attempts to replicate M-Pesa's extraordinary success.
M-Pesa in Kenya is a significant outlier in the mobile money space.

[Edit: assumed M-Pesa founding date of 2007 in wikipedia was when M-Pesa
launched. It actually launched pilot in Oct 2005. Exactly one year after
Philippines system]

~~~
smabie
There's a lot of other *Pesa systems in East Africa and they all are
relatively successful: TigoPesa, HaloPesa, AirPesa, etc etc. Everyone talks
about M-Pesa because it was first in East Africa but at this point, it's a
commodity.

~~~
sopooneo
One thing that has always impressed me about these systems: I've never read a
story about a corrupt manager of the deposited funds betting them on the stock
market and losing them. That's something we in The States have had a hard time
preventing and worked hard to legislate against. And still, in a very rough
parallel, we utterly failed at it during the housing bubble.

So if my conception of the situation even makes sense, how have M-Pessa and
equivalents avoided this pitfall?

~~~
smabie
They haven’t. I just got my 10gb package stolen by voda today. The company is
dishonest and no one around here trusts them. People might get money through
M-pesa, but they convert it into cash asap.

------
markdown
Definitely British. Vodafone started the same service in Fiji, where they call
it MPaisa (paisa meaning money in Hindi). A competing service by rival Digicel
is called Mobile Money.

------
2zcon
Following the money is an unconvincing argument that leads to publicly traded
companies being mostly nationless, Nissan being primarily French, Jaguar being
primarily Indian, and WeWork being fully Japanese.

~~~
NullPrefix
>WeWork being fully Japanese

Is it not Saudi Arabian?

AFAIK they poured multiple billions into SoftBank, which poured those billions
into Uber, WeWork and others.

~~~
2zcon
Ah, but they got their money from zooplankton.

------
lizard___
[https://owaahh.com/the-age-of-mpesa/](https://owaahh.com/the-age-of-mpesa/)

This gives a more succinct history. The idea was that of British citizens
working for Vodacom(Safaricom) in Kenya.

------
sgt
Safaricom is good at sales and marketing in East Africa, not at innovation
from inside of the company. They do use some clever partners though at times,
and the combination can be pretty good. They've obviously taken M-pesa and
grown it into a mature product - listening to their clients, but primarily
from a sales channel.

------
severine
Here's a 2015 discussion on the topic, linked to M-Pesa's Wikipedia page:
[https://news.ycombinator.com/item?id=10612723](https://news.ycombinator.com/item?id=10612723)

 _M-Pesa – a mobile-phone based money transfer and microfinancing service_ :
[https://en.wikipedia.org/wiki/M-Pesa](https://en.wikipedia.org/wiki/M-Pesa)

 _70 points by melenaboija on Nov 23, 2015 | 37 comments_

Top comment:

 _mhogomchungu on Nov 23, 2015

Tanzanian here.

I think calling the service "M-Pesa" is misleading since a lot of other people
are offering the same service.

Here in Tanzania,

"M-Pesa" is the name for the service offered by vodafone,a mobile
communications company.

"Tigo Pesa" is the name for the same service offered by tigo,a mobile
communication company.

"Airtel money" is the name for the same service offered by airtel,a mobile
communication company.

"EzyPesa" is the name for the same service offered by zantel,a mobile
communication company.

For the above reasons,i generally call the service offered by these companies
as "a banking service managed by mobile phone companies".

"Sim banking" is the name of the service offered by a "traditional" bank
called crdb[1] so a more generalized name that accommodates both traditional
banks and cellular network operator banks is in need.

Most traditional banks are also offering the same service.

The only thing they all have in common from the user's perspective is that the
services are offered through ussd codes[1] meaning they are not tied to mobile
phones and they work with any device that supports ussd codes.

I have an application called ussd-gui[4][3] that i use to manage by money at
vodafone "bank" using a mobile broadband modem on my linux system.

[1] [http://crdbbank.com/tz/alternative-
banking/simbanking.html](http://crdbbank.com/tz/alternative-
banking/simbanking.html)

[2]
[https://en.wikipedia.org/wiki/Unstructured_Supplementary_Ser...](https://en.wikipedia.org/wiki/Unstructured_Supplementary_Ser..).

[3] [https://github.com/mhogomchungu/ussd-
gui/blob/master/icons/u...](https://github.com/mhogomchungu/ussd-
gui/blob/master/icons/u..).

[4] [https://github.com/mhogomchungu/ussd-
gui](https://github.com/mhogomchungu/ussd-gui) _

------
ptah
where does the profits go? the party receiving the profits is the owner

------
chrischen
I found this statement interesting:

“If you see the document I sent to @SafaricomLtd you will understand that. All
they did was code!”

------
mikl
Yes.

------
itsanjan
It was made here in India, Pesa literally means money

~~~
square_usual
Pesa means money in Swahili is well, as stated in the first line of the
wikipedia page:
[https://en.wikipedia.org/wiki/M-Pesa](https://en.wikipedia.org/wiki/M-Pesa)

~~~
davidw
Wonder what the etymology is on that? Seems close to 'peso', but that wasn't
really where the Spanish were hanging around, so maybe it's just a
coincidence?

[https://en.wikipedia.org/wiki/Paisa](https://en.wikipedia.org/wiki/Paisa)
seems to indicate it's possibly from the Portuguese.

~~~
toyg
_> that wasn't really where the Spanish were hanging around_

For a while, Spanish currencies and conventions acted as reference for most of
the trading world operating across oceans, regardless of Spanish presence. It
was a bit like the modern USD.

