Originally developed by Vodafone and released in 2007, M-Pesa is an electronic mobile money transfer service that allows users to pay for goods, services and receive money instantly. M-Pesa operates on top of the existing telecom networks, allowing users to access money from their bank accounts, thereby avoiding costly and inefficient banking processes.

M-Pesa has become increasingly popular among those living in East Africa, mainly due to the fact the service is much more convenient for its users. Using M-Pesa does not only provide a more accessible and cost efficient way to handle payments but also allows users to transfer money from person to person or from company to company with ease. This provides an answer to money transfer difficulties that arise due to vast distances between users and limited access to banking facilities.

M-Pesa works by allowing users to deposit money in a secure M-Pesa account held by a mobile network operator. They can then transfer it to others by providing those users with their phone numbers. The recipient finds the money on their account and can use it to access goods and services without a need of having a bank account. This eliminates the need of having cash, credit cards or debit cards as well as not needing to visit a bank in order to have access to their funds.

The popularity of M-Pesa arises from the fact users can make near real-time payments both domestically and internationally, securely and with reduced transaction fees in comparison to conventional banking. M-Pesa also allows users to pay for property and stock investments, purchase airtime for their phones, buy online goods and services, among other functions.

The creation of M-Pesa has helped to increase financial inclusion in East Africa, and quite possibly, in the other countries where it is available. It should be noted, however, that due to its design M-Pesa is not considered a financial institution and thus, it is not governed by financial regulations. This means that consumer protection might not be as strong as in a bank and that user accounts are not FDIC insured. Nevertheless, the overall benefit and convenience of using M-Pesa is clear - unbanked individuals that previously would be cut off from the financial world can now easily handle monetary transactions.