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The Next Wave: An Amazon-Mpesa deal for safer income

What makes a company succeed? Product, team, market size and regulatory environment are familiar and correct answers.   What makes a succeeding company great? A certain proverb comes to mind: “If you want to go fast, go alone; if you want to go far, go together.” Is this an African proverb? That’s heavily contested, but it sure has value for African companies.    Market fragmentation is a common complaint on the continent. But as experienced companies like Safaricom demonstrate, one way to work around the problem is to land giant partnerships. More on that in a moment, after this message from our partner.

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Now, let’s dive in.
Going beyond
Last week, Bloomberg reported that Safaricom, Kenya’s biggest telecoms provider, plans to integrate M-Pesa as a payment option on Amazon.   It could make it easier for Amazon customers in Kenya to shop and ship goods using mobile money. But there are two other motives; recovery from 2020 and expansion beyond Africa.   Safaricom’s full year financial results showed a 9.9% year-on-year increase in customers that are active for at least one month; the company now has 31.5 million customers.    But annual profit declined for the first time in a decade and M-Pesa, which accounts for 33.0% of Safaricom’s revenue, wobbled.   Safaricom’s profit after tax for the 12 months up to March 31, 2021 reduced by 6.8% – from 73.66 billion shillings to 68.67 billion shillings ($642 million).   One month active M-Pesa customers grew 13.6% to 28.31 million but Mpesa revenue declined 2.1% over the same period.   The company resumed charging for transfers in the second half of 2020, causing an upward curve. Total M-Pesa transaction value grew 58.2%. Volume of transactions grew 29.8%. 

Source: Techcabal

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