If you are a regular user of M-Pesa, the mobile money service from Safaricom, which, if you’re Kenyan, you probably are, you might have heard that it is planning to introduce standing orders as a new feature. But what are standing orders and why are they important?
Standing orders are a way of setting up recurring payments or transfers from your account, which in this case would be your mobile money account, to another person, business, or service. For example, you can use a standing order to pay your rent, utility bills, insurance premiums, or subscriptions every month without having to remember or do it manually.
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You can also use a standing order to save or invest a certain amount of money every week or month into another M-Pesa account or product.
Standing orders are common in banking services, but they are very rare in mobile money platforms. In fact, M-Pesa will be the first mobile money platform in the world to offer this feature, according to George Njuguna, the Director of Information Technology (CIO) at Safaricom .
This is a big deal because it will make M-Pesa more convenient, reliable, and secure for its users. It will also open up new possibilities and opportunities for financial inclusion, access, and empowerment.
What are some potential use case scenarios?
One of the areas where standing orders can have a positive impact is health. According to Njuguna, M-Pesa will use this feature to enable automatic deductions for medical insurance products such as Linda Jamii and M-TIBA. This will make it easier for people to afford and access quality healthcare services without worrying about paying upfront or running out of funds.
Another area where standing orders can be useful is housing. Many people in Kenya struggle to pay their rent on time or face eviction due to late payments. With standing orders, tenants can set up a regular payment to their landlords from their M-Pesa accounts and avoid these problems. Landlords can also benefit from having a steady and predictable income stream from their tenants.
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Standing orders can also help people achieve their financial goals and aspirations. Whether it is saving for education, starting a business, or buying an asset, standing orders can help people plan and commit to their future.
For example, M-Pesa users can set up a standing order to transfer money into their savings or investment products such as M-Shwari, KCB M-Pesa, Mali, and so on. This way, they can build their wealth and financial security over time.
This is still not a thing
M-Pesa has not yet announced when standing orders will be available to its users or how they will be implemented. However, it is clear that this feature will be a game-changer for the mobile money platform and its customers.
It will enhance the convenience, reliability, and security of M-Pesa transactions and enable new possibilities and opportunities for financial inclusion, access, and empowerment.
