M-Pesa, PayPal and TransferTo have collaborated to add a fresh layer of service to Kenya's e-commercial prospects and the East Africa market in general.
Qualifying M-Pesa users in Kenya can link their PayPal accounts to their M-Pesa wallets and purchase goods and services from international commerce sites, as well as top up their PayPal accounts.
Users can also withdraw funds within a few hours or up to three days, depending on the amount.
E-commerce merchants can accept and process credit card and PayPal transactions from around the world. There are currently 18 million merchants and 210 million PayPal accounts globally.
The two companies chose cross border money transfer service TransferTo facilitate the services link.
"M-Pesa's collaboration with PayPal will open up global market places and the global economy to millions of Kenyan and Kenyan-based businesses and individuals," said Joseph Ogutu, Director – Strategy at Safaricom.
"Beyond money transfers, this development ushers in a new era of speed and convenience beyond borders, as we work towards innovating robust platforms through which more entrepreneurs and consumers can benefit from the growing e-commerce industry", Ogutu said.
Efi Dahan, PayPal General Manager for the Middle East, Africa, and Russia said that the move is to increase ecommerce activity in Africa and democratise financial services.
"We are excited to bring the M-Pesa mobile wallet and PayPal joint services to the Kenyan market, which makes it more convenient and secure to withdraw and add money to their accounts while participating in the global digital economy," said Dahan.
Equity Bank was the first to allow users to withdraw their PayPal funds to their bank account in 2013.
The bank has lowered its transaction fees to 1% for withdrawal for amounts above US$5,001. Withdrawals between US$2,001 to US$5,000 will incur a fee of 1.125%, while amounts between US$1,001 and US$2,000 will be charged a fee of 1.25%. Amounts below US$500 will be charged 1.5%.
According to Equity Bank the restructured pricing is designed to attract diaspora remittance revenue. The bank also adjusted the transfer time from eight days to three days.