MICROCAPITAL BRIEF: Safaricom, Vodacom Partner to Support Cross-Border Mobile Money Transactions Between Kenya, Tanzania via M-Pesa

Safaricom, a Kenya-based telecommunications company, has partnered with South Africa-based telecommunications firm Vodacom to offer cross-border transactions via M-Pesa, a mobile money service developed by UK-based telecom company Vodafone, which is a majority shareholder in both Safaricom and Vodacom. Approximately 20 million M-Pesa customers in Kenya and seven million M-Pesa users in Tanzania will be able to send money to each other using the same processes they currently use to make national transfers [1]. Currency conversion allegedly will happen automatically, and transferred funds will be immediately available [2].

According to the US-based World Bank, formal financial transactions between Tanzania and Kenya were approximately USD 133 million in 2012 [3].  Kenya’s telecommunication sector reportedly accounts for 30 percent of the world’s 61 million active mobile money users [4].

Since its 2007 launch in Kenya, M-Pesa has also been made available in the Democratic Republic of the Congo, Egypt, Fiji, India, Lesotho, Mozambique, Romania, South Africa and Tanzania. As of 2014, M-Pesa serves 19.5 million customers worldwide. As of September 30, 2014, Safaricom reported 21.9 million customers [5]. As of March 2014, Vodacom reported total assets of ZAR 60.7 billion (USD 5.7 billion) and 57.5 million customers in Africa.

By Caroline Zhu, Research Associate

About Safaricom

Safaricom is a Kenya-based telecommunications company that was established in April 1997 as a private limited liability company and was converted into a public company with limited liability in May 2002. Safaricom is 35-percent owned by the Government of Kenya and 40-percent owned by the UK-based telecommunications company Vodafone. As of September 30 2014, the company has market capitalization of KSH 516.5 million (USD 5.78 billion). As of September 30, 2014, Safaricom reported 21.9 million customers.

About Vodacom

Vodacom is a South Africa-based mobile communications company that is 65-percent owned by UK-based telecommunications company Vodafone. As of 2014, Vodacom has formal operations in the Democratic Republic of the Congo, Lesotho, Mozambique, South Africa and Tanzania, and it has offices in eight other African countries. As of March 2014, Vodacom reported total assets of ZAR 60.7 billion (USD 5.7 billion) and 57.5 million customers in Africa.

About Vodafone

Vodafone Group, headquartered in London, is a British multinational telecommunications company. It operates in about 30 countries and has partner networks in approximately 50 additional countries. As of 2014, Vodafone reported a customer base of 444 million people in approximately 80 countries.

About M-Pesa

M-Pesa is a mobile money service that was launched in Kenya in 2007 and has since been replicated in nine additional countries. Launched by Safaricom Limited, a Kenya-based cellphone service provider, M-Pesa was developed by Vodafone Group Private Limited Corporation, a British mobile network operator. The “M” stands for “mobile,” and “pesa” means “cash” in Swahili. As of December 31, 2014, M-Pesa serves approximately 19.5 million clients worldwide. As of 2014, the service is also available in the Democratic Republic of the Congo, Egypt, Fiji, India, Lesotho, Mozambique, Romania, South Africa and Tanzania. M-Pesa was relaunched in South Africa in July 2014 after first being introduced in 2010 and suspended in early 2014.

Sources and Additional Resources:

[1] Safaricom Press Release: “M-PESA Customers Now Able to Send and Receive Money from Tanzania,”http://www.safaricom.co.ke/about-us/media-centre/press-releases#

[2] Biztechafrica: “M-PESA: Vodacom Tanzania, Safaricom Kenya connect on transfers,” http://www.biztechafrica.com/article/m-pesa-vodacom-tanzania-safaricom-kenya-connect-tr/9843/#.VTk5xxPF9cZ

[3] Vodafone Press Release: “Vodafone launches M-Pesa payments between Tanzania and Kenya,”http://www.vodafone.com/content/index/media/vodafone-group-releases/2015/m-pese-tanzania-kenya.html

[4] CNBC News: “M-PESA Takes on Cross-Border Approach to Financial Transactions,” http://www.cnbcafrica.com/news/east-africa/2015/03/09/m-pesa-safaricom-vodacom/

[5] Safaricom Corporate Fact Sheet, http://www.safaricom.co.ke/investor-information/corporate-fact-sheet

MicroCapital Universe Profile: M-Pesa

MicroCapital Universe Profile: Vodacom Group

MicroCapital Universe Profile: Vodafone

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