M-Pesa, which offers peer-to-peer transactions in countries that include Kenya, Tanzania and Mozambique, saw its star rise during the COVID-19 pandemic. It has since begun exploring new services, such as savings, small loans and payroll.
For now, it makes sense to keep M-Pesa in-house to cement customer loyalty, Vodafone Chief Executive Nick Read said on a call with reporters. “In the future, there may be opportunities to scale further,” Read said while discussing quarterly results. “At that point, I think we would make the decision as to whether we would want to do anything, let’s say, more inorganically.”
In the meantime, Read said Vodafone will carve out its financial services into a new legal entity “to highlight to our investors the size and scale of that business and also offer opportunities to grow it in different ways.”
M-Pesa (M for mobile, “Pesa” for the Swahili word for money) has become popular in places where many people have mobile phones but no bank accounts — especially during the COVID lockdown, when transactions on M-Pesa jumped 45 percent from the previous year. According to Read — based on figures from Kenya’s Central Bank — the volume of transactions is nearly equivalent to half of Kenya’s gross domestic product.
It’s been a busy year for Vodafone and M-Pesa. As PYMNTS reported in April, Vodafone was one of two wireless providers seeking a telecom license in Ethiopia, Africa’s fastest-growing economy. (The company ultimately received the winning bid, beating out rival MTN Group.)
In May, the Kenyan telecom Safaricom announced it was considering using M-Pesa on Amazon’s eCommerce platform as part of its global expansion efforts.
And last month, the news broke that Vodafone and Amazon Web Services were working together to bring “edge computing” to business customers in the U.K. Edge computing quickly analyzes bulk data before moving it to cloud servers.