Vodafone has unveiled its first international money transfer corridor, enabling customers using its M-Pesa mobile money service in Tanzania and Kenya to transfer and pay money to each other.

Individuals using the service will benefit from the low cost of M-Pesa, compared to existing international remittance services between the two countries, and as with many emerging markets, more people have regular access to mobile phones than traditional banks, meaning a whole new section of the population can now conduct trade internationally.

“With a substantial unbanked population transacting mainly in cash, the Tanzania-Kenya corridor represents a significant opportunity for M-Pesa to give people and companies an accessible, low-cost alternative to traditional international remittances,” said Michael Joseph, director of mobile money at Vodafone.

Tanzania and Kenya are two of the biggest economies in east Africa, and the new M-Pesa service enables customers to use their mobile phones for simple, safe and secure money transfers between the two nations via an established network of 180,000 agents across both countries.

In 2012, formal remittances between Tanzania and Kenya stood at around $133m (£88m), according to the World Bank. Traditional banks and money transfer operators can charge up to 31 per cent of the transaction, depending on the service provider.

In comparison, using M-Pesa to transfer $50 across the border would cost only around one per cent of the transaction. plus a foreign exchange fee.