M-Pesa and OPay: Go-to-Market Strategies for Onboarding the Unbanked
M-Pesa and OPay have been pivotal in revolutionizing financial inclusion in Africa by effectively onboarding the unbanked population. Their go-to-market strategies leverage technology, partnerships, and local market understanding, ensuring widespread adoption and financial empowerment.
M-Pesa’s Strategy
- Leveraging Mobile Network Infrastructure
M-Pesa, launched by Safaricom in Kenya in 2007, capitalized on the widespread mobile phone usage in the country. With over 52 million active mobile connections in Kenya as of 2021, Safaricom used its robust network to provide financial services to areas with limited banking infrastructure. This approach ensured that even users without smartphones could access services via basic mobile phones.
- Agent Network Expansion
M-Pesa built an extensive network of over 237,000 agents across Kenya by 2022. These agents are pivotal for cash-in and cash-out transactions, enabling users to deposit and withdraw money seamlessly. The accessibility of these agents in urban and rural areas has significantly contributed to M-Pesa’s penetration, with over 30 million active users reported in 2021.
- Partnerships and Ecosystem Integration
M-Pesa’s partnerships with banks, utility companies, and retailers have expanded its service offerings. Collaborations with international organizations like Western Union have enabled cross-border remittances, further increasing its utility for users. Additionally, M-Pesa’s integration with the government for disbursing social benefits has strengthened its trust and reliability among users.
OPay’s Strategy
- Diversified Service Offering
OPay, a fintech startup launched in Nigeria in 2018, offers a broad range of services beyond mobile money, including ride-hailing, food delivery, and e-commerce. This multi-service approach attracts a diverse user base, making financial transactions a part of everyday activities. By 2020, OPay had over 5 million registered app users, demonstrating the effectiveness of this strategy.
- Digital Wallet and QR Code Payments
OPay introduced a digital wallet that allows users to perform transactions using QR codes, making payments easier and faster. This technology has been particularly effective in urban areas where smartphone penetration is higher. OPay reported handling over $2 billion in transactions in December 2020 alone, highlighting the rapid adoption of digital payments.
- Aggressive Agent Network Expansion
OPay has aggressively expanded its agent network, reaching over 300,000 agents across Nigeria by 2023. These agents facilitate cash-in and cash-out services, mirroring M-Pesa’s model. This extensive network ensures that users can access financial services even in remote areas, driving financial inclusion.
- Strategic Investments and Funding
OPay has secured significant funding, including a $400 million investment led by SoftBank in 2021, valuing the company at $2 billion. This financial backing has enabled OPay to scale its operations, invest in technology, and expand its services, reinforcing its market presence and user acquisition efforts.
M-Pesa and OPay have demonstrated that innovative go-to-market strategies can effectively onboard the unbanked by leveraging mobile technology, extensive agent networks, and strategic partnerships. Their success in Kenya and Nigeria serves as a model for other regions aiming to enhance financial inclusion and economic empowerment through fintech solutions.