Vodafone launched its M-Pesa mobile payment system in Romania on Monday, marking the first time the successful service has been available in Europe.
The operator is focusing on money transfer and payment services with the Romanian version of M-Pesa, which to date has racked up 17 million customers in African markets including Kenya, South Africa, and the Democratic Republic of Congo.
M-Pesa uses SMS to transfer money and make payments for goods and services. While the African service has targeted the region's largely unbanked population--people with no bank accounts--the Romanian version will also enable people with accounts to make mobile money transfers.
The amount that can be paid or transferred in Romania ranges from 1 Romanian leu (€0.22/$0.30) to 30,000 lei. Users will also be able to pre-pay mobile airtime, pay utility bills, and deposit or withdraw cash from authorised agents.
Michael Joseph, director of mobile money at Vodafone, said Romania is similar to the African markets where M-Pesa is already established. "The majority of people in Romania have at least one mobile device, but more than one third of the population do not have access to conventional banking."
Around 6 million people in Romania now have access to M-Pesa services, and Vodafone said it will increase the number of participating retail outlets from 300 today to 2,000 by end-2014.
M-Pesa's success in emerging markets makes its launch in the relatively mature European market significant. Operators in the region have struggled to make headway with m-payment services, where there is greater competition from established payment methods including credit and debit cards.
The GSM Association revealed in February that 52 per cent of the world's mobile money service users are located in sub-Saharan Africa, and that the number of active mobile money users hit 61 million at end-June 2013 compared to 37 million at the same point in 2012.
Analysts believe European operators' best chance of success in mobile financial services lies in partnering with banks and credit card companies.
Orange took heed when it launched Orange Cash, a prepaid NFC-based service, in France in February. The service is a result of a partnership between the operator and Visa Europe that was announced in November, and offers users the ability to make secure payments to retailers via a compatible mobile phone.
Vodafone, meanwhile, beefed up M-Pesa with a deal in February that enables M-Pesa users to transfer and receive cash through 334,000 MoneyGram agents in 200 countries, and also access MoneyGram services through a mobile app for iOS, Android, and Windows operating systems. The service is due to be rolled out during the second quarter of 2014.
The company also recently launched M-Pesa in India, in partnership with ICICI Bank.
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