M-Pesa, the first and most successful mobile money payment service, has been acquired by South Africa’s Vodacom and its Kenyan subsidiary Safaricom in a new joint venture that they hope will spur the growth of this novel new form of payment on the continent.

The GSMA already says half of all the world’s mobile money services are in Africa, which is a testament to how successful this trend, originally launched by Safaricom in 2007, has been.

Safaricom was a Vodafone subsidiary at the time, and its ownership was transformed to Vodacom, another subsidiary, in 2017 to consolidate the London-based Vodafone’s subsidiaries in sub-Saharan Africa.

M-Pesa is Africa’s largest payments platform with some 40-million users in Kenya, Tanzania, Lesotho, Democratic Republic of Congo, Ghana, Mozambique and Egypt. It processes over a billion transactions every month, according to Vodacom. 

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Interestingly only 25% of all 40m M-Pesa customers have a smartphone, but this is growing by 10% every year.

Originally announced in 2019, this transaction will allow it to accelerate M-pesa’s growth in Africa by giving both operators full control of the M-pesa brand, product development and support services, and additionally allow expansion into new African markets, Vodacom says.

“This is a significant milestone for Vodacom as it will accelerate our financial services aspirations in Africa,” says Vodacom Group CEO Shameel Joosub. “Our joint venture will allow Vodacom and Safaricom to drive the next generation of the M-PESA platform – an intelligent, cloud-based platform for the smartphone age. It will also help us to promote greater financial inclusion and help bridge the digital divide within the communities in which we operate.”

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Michael Joseph, the outgoing CEO of Safaricom, praised the management, support and development of the M-Pesa platform being relocated to Kenya, “where the journey to transform the world of mobile payments began 13 years ago”. The new partnership will allow the platform development to be consolidated, synchronise product roadmaps, and “improve our operational capabilities into a single, fully converged centre of excellence”.

Nick Read, the CEO of Vodafone Group, said: “M-Pesa is hugely successful and enables millions of unbanked people in Africa to transfer money, pay bills and trade. It benefits communities and helps create a multitude of small and micro-business ventures. However, with the rapid increase in smartphone penetration, the evolution into financial services and the potential for geographical expansion, we believe the next step in M-Pesa’s African growth will be more effectively overseen by Vodacom and Safaricom.”

The disposal of the M-PESA brand, support and product development services to Vodacom and Safaricom is broadly financially neutral for Vodafone Group, it said.