Through a joint venture, Vodacom and Safaricom have acquired the M-Pesa brand, product development and support services from Vodafone.
In a statement today, Vodacom says the transaction, which was first announced in 2019, will accelerate M-Pesa’s growth in Africa by giving both Vodacom and Safaricom full control of the M-Pesa brand.
In May last year, ITWeb reported Vodacom and Safaricom were in the process of buying the M-Pesa brand from parent company Vodafone, in a deal reportedly worth over R190 million.
The telcos now say this presents them with the opportunity to expand M-Pesa into new African markets.
M-Pesa has become a key revenue stream for both Vodacom and Safaricom, with transactions exceeding R41 billion ($2.8 billion) as of September 2019.
It has been growing faster than expected, with earnings data showing Vodacom posted big gains from the mobile money platform last year.
Vodacom recorded sharp growth in its M-Pesa mobile money service, contributing R905 million in the three months ending June 2019.
M-Pesa is the largest payments platform on the African continent, with 40 million users. The mobile banking service is operational in Kenya, Tanzania, Lesotho, Democratic Republic of Congo, Ghana, Mozambique and Egypt.
With the latest development, Shameel Joosub, Vodacom Group CEO, says: “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.”
Similarly, Michael Joseph, outgoing Safaricom CEO, welcomed the acquisition, saying: “For Safaricom, 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 roadmaps, and improve our operational capabilities into a single, fully converged centre of excellence.”
Commenting on the transaction, Nick Read, Vodafone Group CEO, says M-Pesa is hugely successful and enables millions of unbanked people in Africa to transfer money, pay bills and trade.
“It benefits communities and helps create a multitude of small and micro-business ventures. 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 says.
Last year, the mobile money service received global recognition and was named in the top 10 of the most influential projects of the past 50 years by Project Management Institute.
The mobile microfinancing platform was recognised for delivering cutting-edge mobile technology that allowed Kenya to leapfrog past more advanced economies and start a banking revolution.
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