Mobile payment system for Africa wins innovation award
Mobile banking for Kenya wins innovation award
The system, known as M-PESA, was developed by Cambridge consultancy Sagentia and mobile operator Vodafone for Safaricom in Kenya.
The service enables customers to send money safely and cheaply using a mobile phones and the Safaricom network. Its name derives from the Swahili word for money.
Worldwide, there are more than twice as many people who have a mobile phone than have a bank account.
The service offers simple, tailored menus through which people can send fully encrypted and PIN protected messages to a financial accounting system. It enables organisations to receive and distribute money, their customers to access it. Individuals can also use it to move money around the country, and around the world.
The service took two years to develop and roll out in Kenya, and is expected to continue for at least a further two years.
Sagentia has created a new business unit, called Managed Services, to develop similar combinations of technology and services for other clients.
Dr Tim Murdoch, who heads the new business unit, said: "Many people in emerging economies have to travel far from their home to find work and need to be able to send money back to their families so they can pay bills. Traditionally, this has meant high fees, risky unregulated services, or long expensive trips carrying cash in an unsafe and unpredictable environment. We worked with local communities in Kenya to understand their needs and have delivered a solution, which provides financial services to unbanked customers via their mobile phone.”
M-PESA is a secure application that resides on the customer’s SIM card, not their phone. A customer uses the M-PESA menu to enter details of the transaction, authorising them with a PIN number. Unlike traditional Chip and PIN, however, they only ever put their PIN into their own phone, reducing the risk of interception. The M-PESA application on the SIM then encrypts the transaction request before sending it for authorisation on the centrally managed and fully audited accounting platform. This then transfers funds to other accounts, applies appropriate charges and communicates the results to the appropriate parties.
The Telecommunications Sector award was sponsored by Nortel and was one of 15 categories announced at a ceremony at the Park Plaza Riverbank in London on Monday evening.
Robin McGill, IET chief executive, said: “I would like to congratulate all the winning and short-listed entries in this year’s Innovation Awards, which demonstrate genuine novelty and represent a significant technological advance for the industry.
“The entries which made it to the shortlist are a very impressive role call of innovation and although it may be a cliché to say “everyone is a winner,” in this case I am sure it is true. The awards highlight the depth and breadth of innovative work which is being carried out and it and it is clear from the range of entries that innovation is alive and well.
“The work undertaken on the projects highlighted by the Innovation Awards will help businesses grow and develop and have a positive impact in many areas.”