From ‘stupid idea’ to a financial revolution: Michael Joseph reveals how M-Pesa almost didn’t happen

Safaricom Board Chairperson Michael Joseph has revealed how at the beginning, almost 18 years ago, M-Pesa was dismissed as nothing but a stupid idea and a costly gamble.

According to Joseph, when presented with the idea for the mobile money service, Vodafone shareholders were skeptical, calling it a waste of time and money.

Speaking at an event to mark M-Pesa’s 18th anniversary, the former Safaricom Chief Executive Officer (CEO) went on to note that he however had other ideas, and was hell-bent on pushing M-Pesa through.

"It cost us a lot of money, and during that time, Vodafone shareholders came in and said we were wasting time and money, that this was a stupid idea. But I said, ‘I’m going to do it anyway,’” Joseph recalled.

That gamble would go on to transform Kenya’s financial landscape. Today, M-Pesa processes over 80 million transactions daily, moving more than Ksh.90 billion every single day and accounting for over 55% of Kenya’s Gross Domestic Product (GDP).

The telco’s current CEO, Peter Ndegwa, described the M-Pesa service as more than just a technological innovation, but also as a financial revolution.

“It brought financial services to the fingertips of millions of Kenyans, enabling them to send and receive money, pay bills and access credit with unprecedented ease and convenience. It transformed the way people did business, empowered small entrepreneurs and drove economic growth, M-Pesa was not just a technological innovation, it was a social revolution,” said Ndegwa.

As part of the anniversary celebrations, Safaricom launched Ziidi, a mobile-based money market fund that allows Kenyans to save and invest from as little as Ksh.100, with a return of at least 7.9% on savings.

“If you look at money market quite exponentially, I believe it’s in the rate north of 15 percent on an annual basis so it means people want to get enhanced return, especially in a period such as last year when we saw elevated interest rates in the country,” said Safaricom’s Chief Financial Services Officer, Esther Waititu.

“Money market funds being short term investment, people started moving money towards that but sometime entry barriers for consumers become a bit of a hindrance, that’s why part of the experiment there was to see how people can invest.”

While M-Pesa has driven financial inclusion in Kenya, its expansion has come with rising operational costs. The company now manages over 300,000 agents across the country, with agent commissions making up the bulk of expenses.

“When you think about the agent's commissions, they are our largest cost. When you think of this from a business perspective in running M-Pesa on its own, because they are part of our infrastructure, and we make a point to ensure they are adequately compensated,” added Waititu.

Beyond Kenya, M-Pesa now operates in seven other countries and has integrated with over 47 banks, fintech firms, and other platforms to enhance its services.

As Safaricom looks to the future, the company has reaffirmed its commitment to innovation and expansion, targeting a larger share of the African market.

What was once dismissed as an impractical idea has grown into a financial powerhouse, reshaping how people save, invest, and transact across the continent.