Telcos clinch M-Pesa brand deal, transfer management
Lewis Njoka @LewisNjoka
Safaricom and Vodacom now have the full control of M-Pesa after acquiring the money transfer platform from Vodafone through a newly created joint venture.
In a statement, the two announced they had completed the acquisition of the M-Pesa brand, product development and support services, marking the conclusion of the acquisition process.
Prior to the acquisition, the road map for M-Pesa’s future was mostly determined by Britain’s Vodafone despite the fact that most of M-Pesa’s business is in Africa.
The transaction, first announced in 2019, will accelerate M-Pesa’s growth in Africa by giving Vodacom and Safaricom full control of the brand, product development and support services as well as the opportunity to expand into new African markets.
Paid as royalties
The move will also enable the two save on huge sums of money paid as royalties to Vodafone.
Kenya’s Safaricom pays two per cent of its annual M-Pesa revenue to Vodafone while Vodacom, a South African Company, pays five per cent for its M-Pesa businesses, which are majorly in Tanzania.
Outgoing Safaricom acting CEO Michael Joseph said the firm is 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.
“The partnership with Vodacom will allow us to consolidate our platform development, synchronise our product road maps more closely, and improve our operational capabilities into a single, fully converged Centre of Excellence,” he added.
“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 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,” said Vodacom Group chief executive Shameel Joosub.
Vodafone Group’s CEO Nick Read, supported the move saying he believed the next step in M-Pesa’s African growth will be more effectively overseen by Vodacom and Safaricom.
M-Pesa is one of Safaricom’s main income earners.
In 2019, the company made Sh63.4 billion net profit with M-Pesa raking in revenues totaling to Sh74.9 billion, a 19.2 per cent growth for the mobile money platform compared to 2018.
In May last year, Reuters reported that Safaricom and Vodacom had agreed to form a joint venture to acquire M-Pesa intellectual property rights from Vodafone at a cost of Sh1.4 billion.
