MPESA set for fullscale system upgrade

The launch of the second generation of Safaricom’s M-PESA platform has started as it prepares to perform a full scale system upgrade aimed at improving efficiencies and speed over the next week.

This follows an earlier announcement made by Safaricom that most of its M-Pesa services would be affected for some time including M-Shwari services .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. The upgrade and relocation of the platform also comes at a time when M-Pesa is eyeing government payments such as pensions and salaries paid to beneficiaries in remote locations.

“This is a milestone moment for the M-PESA platform as we embark on our final preparations ahead of the full migration process. We anticipate this new platform will unlock a new era of transformational mobile financial services.” said Betty Mwangi, GM – Financial Services, Safaricom.

The company will be integrating all existing internal systems including security, redundancy and disaster recovery on the new platform. The Central Bank of Kenya and the Communications Authority of Kenya have been provided with oversight over the entire migration process to ensure that Safaricom meets its stated goals with minimal disruption to the customer.

“What this means is that we are not only offering faster speeds and more secure transactions to our customers, we are also creating the foundation for a more accessible system that will further enable the rapidly growing mobile money ecosystem in Kenya to continue to grow and be fuelled by locally created solutions,” said Ms. Mwangi.

Additional benefits of the new system will extend to enhanced system stability due to reduction in points of failure; functional flexibility that will allow a wider range of customer services; easier integration onto M-PESA for 3rd Parties; and improved business continuity for continued service availability.

According to Kenneth Leonard Okwero, Safaricom’s Head of Department, Products and Services Development, It has taken the telecom Giant close to 2 years to migrate the entire M-PESA platform to Kenya Some milestones included conducting a number of dry runs to ensure that stability and uptime are restored as soon as possible after the migration.

He also added that the new system will enable up to 900 transactions per second up from 450 M-Pesa transactions. However, this would differ from the various transactions the platform offers.

This might also see the M-PESA Application Programming Interface (API) roll out commence. With the API roll out many website owners will be able to implement some functionalities such as M-Pesa payment options on their websites. This will also see many websites implement very efficient payment gateways.

The developer community has for long been anticipating that Safaricom would release an API for its M-Pesa service that would open doors for app developers to easily extend the functionality of M-Pesa to their e-commerce applications.

In Germany, Vodafone had contracted US technology giant IBM to maintain the M-Pesa servers. This however, will continue as Safaricom plans to still work with IBM locally to maintain its servers once they have them in the country. Safaricom also plans to continue working with Chinese technology giant Huawei to help with the installation of the new M-Pesa servers that will be located in Kenya.

Currently Safaricom pays Vodafone between 10 and 25 per cent of the revenues generated through M-Pesa as royalty fees. In its financial year ending March 2014, M-Pesa transactions earned Safaricom Sh26.6 billion meaning that Vodafone is set to get at least Sh4 billion in royalties. With the relocation of servers Safaricom said fees paid to Vodafone is expected to come down but did not disclose to what levels saying this is still under negotiation.

Safaricom had first announced plans to replace its M-PESA platform last year, seeking to migrate the current platform to an enhanced platform that will allow for faster transactions, improved stability as well as enable more functionality from the service.

Over the eight years M-Pesa has grown in leaps to reach 90 million customers and has grown up to a value of Kshs 8 billion and also a great contributor in the country’s GDP as mobile money currently contributes up to 40 per cent to the GDP growth.