A sustainability review of Vodacom’s M-Pesa offering has resulted in the operator choosing to discontinue the service in South Africa.
The operator’s CEO Shameel Joosub said: “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.”
While Vodacom noted that M-Pesa has seen “solid traction based on exponential growth in customer acquisition” in markets with a high unbanked population such as Kenya and Tanzania, it has attracted only 76,000 active users within South Africa.
Across DRC, Lesotho, Mozambique and Tanzania – where financial inclusion is less common – Vodacom had 9.7 million subscribers at the end of 2015. It will continue to operate M-Pesa in these markets.
Joosub added that Vodacom is “fully committed to mitigating any inconvenience to customers impacted by the decision and assures all M-Pesa South Africa customers that their funds remain safe and readily accessible. We remain of the opinion that opportunities exist in the Financial Services environment and we will continue to explore these.”