Photo by: Bloomberg
Mobile network Vodacom South Africa is considering various options for its sluggish mobile money transfer service M-Pesa.
M-Pesa enables customers - particularly unbanked users - to transfer money from person-to-person using mobile phone and text-messaging technology.
In 2010, Vodacom launched M-Pesa in South Africa and the company set a target of reaching ten-million local users.
Vodacom then relaunched the service in August 2014 in a bid to spur interest in the product. The M-Pesa relaunch in 2014 further involved a simplified registration and FICA process and the establishment of 8 800 points of presence.
But Vodacom’s 2015 integrated report revealed that while one million people registered for M-Pesa in South Africa, only 76 000 people were actively using the service. Vodacom, in its 2015 integrated report, further said that “progress has been slower than we’d like” regarding M-Pesa.
“Vodacom conducts regular reviews of its investments and products, including m-pesa South Africa (MPSA),” Vodacom spokesperson Byron Kennedy told Fin24 via email.
“We can confirm that we are currently considering a range of options for MPSA but that no final decisions have been made,” Kennedy said.
Fin24 understands that Vodacom is exploring options for its M-Pesa business that range from enabling employees to generate new ideas for the service to possibly even shutting it down.
M-Pesa’s struggles in South Africa are in stark contrast to other African countries such as Kenya where network Safaricom has recorded over 11-million mobile money users. UK mobile network Vodafone has stakes in both Safaricom and Vodacom.
Moreover, Vodacom's M-Pesa business in its rest of Africa operations has also performed better than in South Africa. Last year, Vodacom reported that it had over eight-million users of M-Pesa across its African operations.