Vodacom has given up on revolutionary mobile money service M-Pesa, in South Africa

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Vodacom has given up on revolutionary mobile money service M-Pesa, in South Africa

6:01 CAT | 10 May 2016

The mobile phone company Vodacom on Monday announced that it is closing its M-Pesa mobile cash transfer service in South Africa at the end of next month.

According to the company’s chief executive Shameel Joosub, “Vodacom’s decision is based on the fact that the business sustainability of M-Pesa is predicated on achieving a critical mass of users. 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”.

Despite the decision, the company intends to continue the service in Mozambique and other countries where banking services are more limited.

Joosub confirmed that “in other markets where financial inclusion is limited and where there is a more supportive macro environment, M-Pesa continues to gain solid traction based on exponential growth in customer acquisition. Kenya and Tanzania are prime examples of this. 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”.

The service was launched in Mozambique in 2013. In September 2015, the company stated that it had over a million customers in Mozambique with over 30 million meticais (at the time this was equivalent to around 75,000 US dollars) in transfers per day.

M-Pesa was launched in Kenya in 2007 and has since been extended to cover Mozambique, South Africa, Tanzania, Lesotho, Democratic Republic of Congo, Ghana, Egypt, India, Romania, and Albania

Source: AIM