A classic case of one-size-does-not-fit-all. The mobile money service, M-Pesa traction in South Africa is a far cry from how it performs in where it began Kenya. So much so that Vodacom said it is winding up M-Pesa services in South Africa in June 2016.
Shameel Joosub, Vodacom’s Chief Executive, 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 prospects of the M-Pesa product achieving this in its current format in the mid-term.”
In few words, Vodacom is shutting down M-Pesa mobile money services next month. However, the mobile money services will remain operational in other economies like Mozambique where the conventional banking services are limited.
“In other markets where financial inclusion is limited and where there is a more supportive macro environment, M-Pesa gain solid traction based on exponential growth in customer acquisition,” continued Joosub.
“Kenya and Tanzania are prime examples of this. It is important to note that this decision does not affect M-Pesa customers in Tanzania, Lesotho, Mozambique and the DRC, where the product continues to grow exponentially.”
In Mozambique, M-Pesa was launched in 2013 and by September 2015, Vodacom stated it has already signed up more than one million users with over 30 million meticais ($75,000) transferred per day.
The mobile money was first launched in Kenya in 2007 where it recorded probably its best run. It then extended to other African countries like Albania, DRC, Egypt, Ghana, India, Lesotho, Mozambique, Romania, South Africa, and Tanzania.