[ACCI-CAVIE] Mobile money transfer, touted as a major innovation for an underbanked Africa, has evolved significantly over the years. New opportunities have emerged with the digital transformation. Some operators have been able to seize them and gain value.
Safaricom’s mobile financial service, M-Pesa, was launched in 2007 in Kenya. 15 years later, it has become the main driver of the company’s growth in an ever-changing telecom market.
In its financial report for the year 2021, released on May 12, 2022, the leading operator in the Kenyan telecom market revealed that M-Pesa accounted for 38.3% of its estimated annual revenue of Kshs 298,077 million ($2.5 billion). This is an increase of Ksh107.691 million compared to 2021, growing by 30.3%.
In 2021, M-Pesa’s financial contribution was already slightly above that of the voice segment, which has long been Safaricom’s core revenue. 82.647.4 million Kenyan shillings versus 82.552 million Kenyan shillings for voice. For 2022, the voice segment accounted for 29.6% of Safaricom’s revenue. This is KSh83.211.8 million. Together, the two market segments account for 67.9% of Safaricom’s revenue, which is growing by 12.9% compared to 2021.
Evolving with the market
Safaricom has invested accordingly to make M-Pesa a pillar of its financial strength. The company has been able to evolve it through different market contexts. The service, which currently offers a variety of value-added products including payments, credit, savings, international transfers that have joined the traditional money sending and withdrawing offerings, has gone digital. To make it accessible to as many people as possible, Safaricom has increased its 4G coverage to nearly 80% of Kenya. The number of agents increased by 5.7 percent to 262,004 from 247,869 last fiscal year.
The total value of M-PESA transactions increased by 34.0% y-o-y to Kshs 29.55 billion, while transaction volume increased by 34.9% y-o-y to Kshs 15.75 billion.
M-PESA’s monthly active average revenue per user (ARPU) increased by 18.9% y-o-y to Kshs. 305.37, while billable transactions per month per customer increased by 16.6% y-o-y to Kshs. 20.25. M-PESA’s one-month active customers climbed 7.8% year-on-year to 30.53 million.
Well aware of the new challenges that lie ahead in a market that is becoming more digital and seeing more and more fintech, Peter Ndegwa, Safaricom’s chief executive officer, affirmed the company’s determination to continue “enhancing the digital lifestyle of our customers.”