Despite growth, Vodafone plans to shut down the M-Pesa service in South Africa on June 30
Vodafone Group said it recently passed 25 million active customers for its M-Pesa mobile money service M-Pesa, having hit 25.3 million users at the end of March. The carrier said the 27.1% year-over-year growth was mainly boosted by the launch of services in new markets, including Albania and Ghana, with more than 261,000 agents supporting the service overall across 11 countries in Europe, Asia and Africa.
“M-Pesa continues to expand, evolving beyond traditional money transfers to encompass savings and loans, payment of salaries and benefits, settlement of utility bills and school fees and to enable,” said Michael Joseph, director of mobile money at Vodafone.
Vodafone entered into a partnership with the Ministry of Social Development in Lesotho to pay welfare grants using M-Pesa. Also, Kenya’s Ministry of Agriculture is now paying fertilizer subsidies using M-Pesa. The launch of an M-Pesa smartphone app in India is said to enable local customers to pay for goods on eBay, for taxis with TabCab and to book train tickets on India’s national railways. Enterprises in India, including Wal-Mart, are using M-Pesa to improve cash management and business efficiency.
Over the past 12 months, Vodafone agreed to a series of deals with partners allowing M-Pesa customers to interact with other services and across borders, including an agreement with MTN Mobile Money to enable direct money transfers between M-Pesa and MTN customers in seven countries across East Africa; the launch of international money transfer services in Romania, Lesotho and Albania; and an agreement with Tanzania’s major mobile operators to enable interoperability between their domestic mobile money services.
Despite the growth, Vodafone’s South African subsidiary Vodacom recently announced it will discontinue its M-Pesa offering in South Africa effective June 30. According to Vodacom CEO Shameel Joosub, the telco decided to drop the service because “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.”
The executive said the M-Pesa services would continue to be offered in other markets where access to banking services is limited.
