According to recent reports, Vodacom is planning to make big moves in the mobile money space over the next year, with plans to be the most disruptive player in the market.
Vodacom originally launched M-Pesa in South Africa in 2010, when it received a lukewarm response from local consumers. While the service has seen massive success in some other African countries (most notably Kenya where the service originated) it did not see widespread uptake in South Africa.
This lead to the service being re-launched in July of this year, and according to Herman Singh, Vodacom’s Managing Executive of Mobile Commerce, the new iteration is showing good growth.
The new M-Pesa comes with a chip-protected Visa card that can be used to withdraw cash from ATMs and make payments at till points. Vodacom currently has 700 000 active users on the system, and has stated that the aim is to have 1 million subscribers in the first year, and 10 million in five years.
There is also a drive to further develop the platform in order to open it up to more users. According to Singh about 300 000 additional potential users applied, but were rejected because they were either under the age of 16, or not a South African citizen.
The company is working with the Reserve Bank and the Financial Intelligence Centre to open up the platform to younger consumers and foreign nationals.
“It is a huge breakthrough for us that foreigners will be able to become M-Pesa agents, as well as subscribers. We work with thousands of spaza shops and many of them are not owned by South Africans. Foreigners are currently excluded from many financial products in SA and that was never the intention” said Singh.
Vodacom is also looking at expanding its agency network beyond the 8 500 outlets it currently has. Many of South Africa’s major retailers are in the process of integrating the service with their systems.
More than just growing their M-Pesa channel, Vodacom will be focused on innovation within the mobile money sector. “Now our focus is on our partner strategy and on building an entire ecosystem. We have already announced that we have signed with partners to facilitate salary pay-outs, paying out of winnings, sales promotions and commission, and paying out student loans and bursaries through M-Pesa. Loan repayments and cross-border remittances are next,” says Singh.
In addition to this, Vodacom is working on a solution for paying out grants. It was revealed recently that Vodacom plans to bid for the South African Social Security Agency’s tender for the payment of social grants.
Vodacom is also currently disputing a patent in court which would allow them to move into other financial service areas, such as insurance.