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More Africa NewsVodacom and Safaricom mull M-Pesa expansion beyond mobile money but no plans for digital bank

March 10, 2020by myles0

Vodacom Group and Safaricom’s M-Pesa platform has ambitions to do more than just provide mobile money services, reports BusinessTech. Managing executive for M-Pesa at Vodacom, Chris Williamson, said it plans things like enterprise services, group lending and other financial services. However, it does not have plans to become a digital bank, which operates on a very different business model.

M-Pesa needs to keep evolving with the requirements of the predominantly African markets in which it operates, said BusinessTech. This does not mean a relaunch for South Africa, however. Vodacom introduced M-Pesa to South Africa in 2010 and more than 1 million people signed up, but it never reached the overwhelming uptake seen in markets like Kenya and Tanzania.

By 2014, use of the service was so low that Vodacom relaunched the brand with adjusted functionality. In 2016, it was shelved, after failing to get the critical mass needed to sustain the service.

Williamson noted that there are a variety of reasons for M-Pesa’s failure to launch in South Africa, from mobile competition to the developed financial services industry, but said that underpinning everything is the regulatory environment. He said that M-Pesa is in constant communication with central banks and governors wherever it operates, to ensure that they are comfortable with the way the services are run. 

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