Vodacom is set to discontinue its M-Pesa operations in South Africa with effect from 30 June 2016.
Speaking about the decision, Shameel Joosub, Vodacom Chief Executive Officer, said that Vodacom’s decision was based on the fact that the business sustainability of M-Pesa was predicated on achieving a critical mass of users. But based on Vodacom’s revised projections and high levels of financial inclusion in South Africa there was 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. Kenya and Tanzania are prime examples of this. Mr. Joosub also noted that this decision does will not whatsoever affect M-Pesa customers in Tanzania, Lesotho, Mozambique and the DRC, where the product continues to grow exponentially.
With regard to customers, Joosub said, “Vodacom is fully committed to mitigating any inconvenience to customers impacted by the decision and assures all M-Pesa South Africa customers that their funds remain safe and readily accessible. We remain of the opinion that opportunities exist in the Financial Services environment and we will continue to explore these.”