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
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.
The Safaricom share price closed at………….today
“We remain of the opinion that opportunities exist in the financial services environment and we will continue to explore these,” Vodacom said.