Vodacom to abandon M-Pesa in South Africa

Vodacom in South Africa has announced that it will discontinue its M-Pesa money transfer product in South Africa from 30 June 2016. Sounds weird, right? especially coming from a Kenyan like me, what is it that is so hard to integrate M-Pesa into vibrant mainstream African economies.

Shameel Joosub, Vodacom Chief Executive Officer, expanded on the decision to withdraw the product, which is currently available at more than 15 000 outlets countrywide.

“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.”


In a statement Vodacom notes that in other markets where financial inclusion is limited and where there is a more supportive macro environment, M-Pesa continues to gain solid traction based on exponential growth in customer acquisition.

The company says Kenya and Tanzania are prime examples of this, adding that the decision does not affect M-Pesa customers in Tanzania, Lesotho, Mozambique and the DRC, where the product continues to grow exponentially.

In a notice on its website, Vodacom stated that it would inform M-Pesa customers via SMS about the decision.

Customers will receive an error message on the M-Pesa USSD when attempting to use M-Pesa services that have been discontinued, according to the operator.

Customers will not be able send money to someone that does not have an M-Pesa account as from 9 May 2016, although they will be able to purchase airtime, data bundles, electricity, withdraw, send money to other registered M-Pesa customers, use their linked M-Pesa Visa debit card for purchasing at retailers, and make cash withdrawals at ATMs until 30 June 2016.

Joosub also gave a reassurance to Vodacom’s M-Pesa customers saying, “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.

kivuti kamau

Data Modelling, Design & Development

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