Vodacom has pulled the plug on its M-Pesa product in South Africa after admitting that the service doesn’t stand a chance to succeed in the country. By Staff Writer
The mobile phone operator, which is owned by Vodafone, said following a thorough review, it will discontinue its M-Pesa product in South Africa with effect from 30 June 2016.
“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,” Shameel Joosub, Vodacom CEO, said in a statement.
In other markets where financial inclusion is limited and where there is a more supportive macro environment, the mobile phone giant said M-Pesa continues to gain solid traction based on exponential growth in customer acquisition. 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,” the company said on Monday.
With regard to customers, Joosub says: “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.”