Vodacom in deal to buy M-Pesa
• Telecoms giants acquire platform from Vodafone
SA’s largest mobile operator, Vodacom, and Kenya’s biggest telecom company, Safaricom, said on Monday they have completed the acquisition of Kenya’s phone-based money transfer app, M-Pesa, from Vodafone through a newly created joint venture. M-Pesa is said to be the largest phone-based payments platform in Africa with 40-million users, processing more than a billion transactions every month, according to Vodacom.
SA’s largest mobile operator, Vodacom, and Kenya’s biggest telecom company, Safaricom, said on Monday they have completed the acquisition of Kenya’s phone-based money transfer app, M-Pesa, from Vodafone through a newly created joint venture.
M-Pesa is said to be the largest phone-based payments platform in Africa with 40-million users, processing more than a billion transactions every month, according to Vodacom.
The M-Pesa platform created by Safaricom is operational in Kenya, Tanzania, Lesotho, Democratic Republic of the Congo, Ghana, Mozambique and Egypt. About 25% of all M-Pesa customers have access to a smartphone — a figure that is growing by 10% every year, said Vodacom.
MTN has 35-million mobile money customers on its own platform Momo, which contributes 7%, or R10bn, to its revenues and is available in 16 countries.
Vodacom said the transaction, first announced in 2019, will accelerate M-Pesa’s growth in Africa by giving it and Safaricom full control of the brand, product development and support services as well as the opportunity to expand M-Pesa into new African markets.
Vodacom has a 35% shareholding in Safaricom. Both Vodacom and Safaricom have a 50% stake each in the new venture.
Both Vodacom and Safaricom had until recently been paying a portion of revenues from M-Pesa to Vodafone as a royalty.
In a statement, Vodacom group CEO Shameel Joosub said: “This is a significant milestone for Vodacom as it will accelerate our financial services aspirations in Africa. Our joint venture will allow Vodacom and Safaricom to drive the next generation of the M-Pesa platform — an intelligent, cloud-based platform for the smartphone age.
“It will also help us to promote greater financial inclusion and help bridge the digital divide within the communities in which we operate.”
Outgoing Safaricom CEO Michael Joseph said: “We’re excited that the management, support and development of the M-Pesa platform has now been relocated to Kenya, where the journey to transform the world of mobile payments began 13 years ago.
“This new partnership with Vodacom will allow us to consolidate our platform development, synchronise more closely our product road maps, and improve our operational capabilities into a single, fully converged centre of excellence.”
Nick Read, Vodafone group’s CEO, said M-Pesa is hugely successful and enables millions of unbanked people in Africa to transfer money, pay bills and trade.
“However, with the rapid increase in smartphone penetration, the evolution into financial services and the potential for geographical expansion, we believe the next step in M-Pesa’s African growth will be more effectively overseen by Vodacom and Safaricom,” he said.