Revenues from the global mobile financial service M-Pesa have recovered following the reinstatement of fees on person-to-person transactions on the platform.
Kenyan telco Safaricom #ticker:SCOM runs M-Pesa in Kenya and also owns half of the business in the international markets in a joint venture with South Africa’s Vodacom Group Limited.
Kenya and other African countries suspended charges on certain transactions on M-Pesa to offer financial relief to their citizens besides seeking to reduce use of cash to curb the spread of the Covid-19 pandemic.
Vodacom says revenue from the international M-Pesa business, excluding Kenya, rose 10 per cent to Sh8.5 billion in the quarter ended December compared to Sh7.7 billion a year earlier.
The performance was helped by reinstatement of peer-to-peer fees in Mozambique in October 2020 and ongoing platform adoption as customers and governments embraced digital ways of working, Vodacom said.
Kenya and other markets also allowed M-Pesa charges to resume in January, brightening the outlook for the financial platform’s revenue growth.
“Results for Vodacom’s associate investment in Safaricom Plc are disclosed on a bi-annual basis and therefore not included in the quarterly update,” the multinational said.
“From an M-Pesa perspective, Safaricom reinstated peer-to-peer (P2P) fees from January 2021. As such, all our international markets, including Safaricom, were charging for P2P transactions from January 2021.”
In the quarter under review, M-Pesa customers in the international operations increased 7.7 per cent to 16 million.
Average monthly M-Pesa transactions, including Safaricom, was $24.2 billion (Sh2.6 trillion) and represented a growth of 57.8 per cent.
In Kenya, Safaricom reinstated charges on lower-value transactions effective January 1, 2021 in a deal with the Central Bank of Kenya (CBK) which featured a reduction in the fees on some bands.It now costs Sh6 to send between Sh101 and Sh500, down from the previous Sh11. Transactions of between Sh1,501 and Sh2,500 now cost 32 compared to Sh41 previously.All transactions of Sh100 and below continue to be free. M-Pesa currently contributes 28.8 per cent of Safaricom’s total revenue and the share had been rising before the zero-rating policy lowered it from highs of 33.3 per cent.Besides the re-introduction of charges, future growth in the platform’s revenue is expected to come from increased number of customers and new innovations aimed at driving usage.
