M-Pesa, the darling money transfer service pioneered in Kenya by Safaricom, is coming to an end in South Africa, as Vodacom announced today that the service has not performed an expected.
The money transfer service has enjoyed massive success in Kenya and neighboring Tanzania, and since it launched in South Africa in 2010, the network operator set a target of reaching over 10 million people.
M-Pesa in South Africa will officially be shut down in 30 June this year.
Shameel Joosub, Vodacom Chief Executive Officer, said the decision was made simply because the business model didn’t expand as quickly as possible, and it possibly became clear that 10 million users was a bit of a stretch.
“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,” he said in a press statement.
Joosub detailed that the June cut-off should be enough time to help existing customers access their money and conclude any other transactions.
“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.”
Vodacom was also quick to add that even though the service is shutting down in South Africa, it wasn’t going to affect the transfer service in Kenya, Tanzania, Lesotho, Mozambique and the DRC. According to parent company Vodafone, there are more than 19.9million users of M-Pesa elsewhere in the world, and 3.4billion transactions were processed in 2014/15.
[Image – CC by 2.0/Radarmax)