The largest mobile operator in South Africa, Vodacom, Monday announced that it will discontinue its mobile money service M-Pesa in South Africa with effect from the end of next month.
Last year, the operator reported that of its 8 million M-Pesa customers in Africa, one million were registered in South Africa, with only 76,000 active users.
Speaking about the decision, Shameel Joosub, Vodacom Chief Executive Officer, says, “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 prospect of the M-Pesa product achieving this in its current format in the mid-term.”
In other markets where financial inclusion is limited and where there is a more supportive macro environment, M-Pesa continues to gain solid traction based on exponential growth in customer acquisition, said Vodacom in a statement. 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.