ACK Archbishop Eliud Wabukala transacts at an M-Pesa dealer at a stall owned by the ACK church in Likoni, Mombasa on February 18. /FILE
M-Pesa a hard sell in SA, says Vodacom
Vodacom will discontinue its M-Pesa product in South Africa from end of June, it announced yesterday.
Vodacom CEO Shameel Joosub said the decision was based on the fact that the business sustainability of M-Pesa lies in a critical mass of users which it lacked in SA.
“Based on our revised projections and high levels of financial inclusion in South Africa, there is little prospect of the M-Pesa product achieving this in its current format in the mid-term.” Said Joosub in a statement.
Vodacom however said M-Pesa is solid in other markets where financial inclusion is limited and there is a more supportive macro environment that supports an exponential growth in customers for the service.
It cited Kenya and Tanzania as prime examples, with M-Pesa customers in Kenya now standing at 21 million and 7 million in Tanzania, where it launched in March last year.
“It is important to note that this decision does not affect M-Pesa customers in Tanzania, Lesotho, Mozambique and the DRC, where the product continues to grow exponentially,” Vodacom SA said in a statement yesterday.
Vodacom said it is fully committed to mitigating any inconvenience to M-Pesa customers in South Africa.
It also assured all M-Pesa South Africa customers that their funds remain safe and readily accessible.
M- Pesa earned Safaricom Sh32.6 billion last year, up from Sh26. 7 billion in 2014.
As of end March 2015, M-Pesa was contributing 20 per cent of Safaricom’s total revenue.
Last year, Safaricom reported a 14 per cent increase in 30-day active M-Pesa customers to 13.9 million as well as an increase in the average number of transactions per customer.
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“We remain of the opinion that opportunities exist in the financial services environment and we will continue to explore these,” Vodacom said.