Vodafone today announced plans to grow M-Pesa, its peer-to-peer mobile money service for those without a bank account, into a pan-African financial platform. M-Pesa, which is already Africa’s largest payments service, has been steadily growing in the continent since its inception in 2007…
Vodafone today announced plans to grow M-Pesa, its peer-to-peer mobile money service for those without a bank account, into a pan-African financial platform. M-Pesa, which is already Africa’s largest payments service, has been steadily growing in the continent since its inception in 2007.
Currently, M-Pesa only represents 3.5% of revenue for Vodacom – Vodafone’s African subsidiary – but analysts suggest this service could be a grossly underutilised asset for the telecoms giant. Making the service available beyond the seven African nations where it currently operates, such as launching in Ethiopia, could greatly increase the service’s implied value to above $1.5 billion.
“I believe we can turn it into Africa’s largest unbanked bank,” said Nick Read, chief executive of Vodafone. “To achieve this, we need to explore strategic technology partnerships and work with key financial institutions. I believe there is the opportunity to roll out M-Pesa into other countries where we do not have existing mobile operations when the platform is further developed.”
Last week, Oxford Economics released a study
estimating the value of the world’s ‘unbanked’ population at $250 billion dollars for global GDP. Using services like M-Pesa to help generate credit scores for this demographic could be the key to tapping one of the world’s largest fintech networks. This would also allow ‘unbanked’ individuals to gain wider access to a variety of services across many industries, which in turn further improves M-Pesa’s potential utility.
Healthcare and education are among the industries that could directly benefit from mobile payments. “The future of telecoms businesses like Safaricom is using M-Pesa to go into more ecosystems beyond telecoms,” explained Joshua Oigara, head of the Kenyan bank KCB Group.
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