Vodacom is discontinuing its M-Pesa mobile money service in South Africa, following a review of the service’s viability.
In a statement, Shameel Joosub, CEO, said: “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.”
It was reported earlier this year that the operator was reviewing M-Pesa, which has just 76,000 active users in the country.
In contrast, Vodacom noted that the service has seen “solid traction based on exponential growth in customer acquisition” in markets where financial inclusion is more limited, such as Kenya and Tanzania.
By the end of 2015, Vodacom had a total of 9.7 million mobile money users across Tanzania, DRC, Mozambique and Lesotho.
Services in these markets will remain unaffected by the South Africa decision.
Joosub also said that the operator 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”.
He continued: “We remain of the opinion that opportunities exist in the Financial Services environment and we will continue to explore these.”