Despite being lauded as the exemplar par excellence of m-payments, Mobile network Vodacom South Africa is to shut down mobile money transfer service M-Pesa.
M-Pesa enables customers – particularly unbanked users – to transfer money from person-to-person using mobile phone and text-messaging technology. When it was rolled out in 2010, Vodacom was looking to reach 10million users in Africa. As of 2015 on 76,000 were using it.
The carrier has now confirmed that it is to shut the service down.
“Vodacom’s decision is based on the fact that the business sustainability of M-Pesa is predicated on achieving a critical mass of users,” Shameel Joosub, Vodacom’s chief executive officer, said in a statement.
“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,” he added.
Joosub went on: “Vodacom is fully committed to mitigating any inconvenience to customers” and 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.”
Anyone who has attended an payments or mobile conference in the past five years will have heard extensively of how great M-Pesa is and how much of a clear demonstration of the power of m-payments it is. It did get good traction and proved the point that there was a hunger for m-payments in developing markets. Many would argue that carry billing is now taking up the slack and is likely to reach far more consumers. So what’s next for m-payments in Africa and elsewhere? We welcome your thoughts.