Wednesday, December 31, 2014

Safaricom set to transfer M-Pesa servers by April

Corporate News
An M-Pesa outlet. Installation of M-Pesa servers locally is expected to end years of foreign hosting, cited for delayed response to service. PHOTO | FILE 
By OKUTTAH MARK, mokuttah@ke.nationmedia.com
In Summary
  • 19.95m - The number of people who have subscribed to M-Pesa from 14.9 million in 2012.

The transfer of M-Pesa servers from Germany to Kenya will be complete by the beginning of April, promising users of the mobile money transfer service a more reliable system.
The ongoing installation of M-Pesa servers locally is expected to end nearly eight years of foreign hosting, which has at times been cited for delayed response to service interruptions. Safaricom CEO Bob Collymore says the new M-Pesa platform is currently undergoing test runs expected to be completed by end of March.
“We will be running a parallel network from time to time while undergoing the test runs, thereafter we will have a complete switch over. We expect the new platform located here will have bigger capacity, be much faster and allow other merchants to connect directly to the platform,” said Mr Collymore in an interview.
The process of installing the M-Pesa servers locally began 18 months ago. It is expected to minimise service outages that occur whenever the undersea fibre optic cables which relay information to Germany and back are damaged.
Local hosting is also expected to save costs for Safaricom, which will now be in charge of maintenance of the system as opposed to currently when it pays fees to British telecommunications firm Vodafone, which is its biggest shareholder.
Mr Collymore said the new platform would come with additional functions that allow for M-Pesa’s integration with those of other vendors in banking, micro-insurance and retail sectors, especially supermarkets. He, however, said it too early to comment on whether Safaricom will pass on the realised savings to customers in form of lower M-Pesa tariffs.
Safaricom has invested heavily on building the new infrastructure. A higher processing capacity is expected to enable Safaricom clients to settle post-paid electricity bills, insurance premiums and bank payments in real-time.
It currently takes 48 hours for payments made to Kenya Power to reflect on the electricity distributor’s systems while those made to the National Hospital Insurance Fund take 76 hours.
The current M-Pesa platform handles between 200 to 300 transactions per second but after migration the rate is expected to go up to 600 transactions per second.
The upgrade and relocation of the platform locally comes at a time when M-Pesa is also eyeing bulk government payments such as pensions and salaries paid to beneficiaries in remote locations.
The mobile money transfer service is also expected to come under increased competition with the licensing of four Mobile Virtual Network Operators (MVNO); including Equitel, Tangaza Pesa and ZionCell. China’s Huawei has been building the second-generation platform, which is also designed to have improve re-routing of traffic when the system fails.
Safaricom has recorded growth of M-Pesa subscribers to 19.95 million from 14.9 million in 2012 and its agents to 80,335 from 39,401 in the period.

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