Vodacom SA discontinues m-pesa in its domestic market

10 May 2016

Vodacom South Africa has announced it is discontinuing its struggling mobile payments platform ‘m-pesa’ in its domestic market from 30 June 2016, less than two years after the service was relaunched with ‘improved functionality and ease of registration.’ Despite the success of m-pesa in markets such as Kenya and Tanzania, the platform has never taken off in the local market. Vodacom CEO Shameel Joosub said that the ‘business sustainability of m-pesa is predicated on achieving a critical mass of users’, adding: ‘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 [medium] term.’

According to TeleGeography’s GlobalComms Database, Vodacom first introduced m-pesa to South Africa in 2010, though the platform proved to be less successful than expected with a million subscribers using the service. The operator relaunched the m-pesa platform in its domestic market in August 2014 after partnering with Bidvest Bank and Visa, allowing it to add new functionality to the platform in order to address what Vodacom called ‘the specific needs’ of the South African market. The company also overhauled its distribution channels, upping the number of agents to 8,000, compared to around 800 in 2010.

South Africa, Vodacom Group, Vodacom South Africa