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| source: Digital Training Academy |
Citing limited demand, Vodacom will discontinue its M-Pesa product in South Africa on June 30, 2016, pointing out the different varieties of demand for mobile banking and payments products in different types of markets.
Services such as M-Pesa have been wildly successful where most people do not use bank accounts. In contrast, success in countries or markets where there is a high rate of banking inclusion have not proven to be big markets for M-Pesa.
Mobile payments are hugely popular in Africa. By 2012 in Kenya, 17 million M-Pesa accounts had been registered and in 2014 over US$19 billion transactions were made through mobile phones.
By 2014, nine African countries had more people have using mobile money accounts than actual bank accounts.
“Vodacom’s decision is based on the fact that the business sustainability of M-Pesa is predicated on achieving a critical mass of users," said Shameel Joosub, Vodacom CEO. "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.”
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