Safaricom’s M-Pesa revenue shrunk by 33%, amounting to a whooping 1.9 Billion due to reduced betting activities in the country. This is according to the telco’s 2020 Full Year Results released today.
The decline in M-Pesa revenues from betting was mainly due to the closure of top betting platforms, SportsPesa and Betin. The two entities closed operations, following what they termed as punitive taxes and hostile business environment.
M-Pesa however still remained the second highest revenue earner for Safaricom after voice revenues. The mobile money service grew 12.6% YoY in the period. On an underlying basis, excluding the impact of betting and Safaricom’s COVID-19 response which included waiving fees for M-Pesa transactions below Ksh.1000 , M-PESA grew 17.2%.
This growth, according to Safaricom, was driven by savings and lending and P2P which make up two thirds of the total growth.
Safaricom however notes that it has seen a slowdown in the growth rates across withdrawals and payments, partly driven by a general economic slowdown. This is likely to get worse as the coronavirus crisis continues to evolve in the country, looking into FY21.
Safaricom says ‘’While we are facing some short term headwinds, there is still a lot of opportunity to grow and we are excited about M-PESA’s future. ‘’
The telco together and Vodacom recently announced that they have now completed the full acquisition of the M-PESA brand from Vodafone through a newly-created joint venture. The transaction is expected to accelerate M-PESA’s growth in Africa by giving both Vodacom and Safaricom full control of the M-PESA brand, product development and support services as well as the opportunity to expand M-PESA into new African markets.
MPESA now accounts for 34% of Safaricom’s service revenue, which represents an increase of nearly 7ppts from just three years ago.