Vodafone, MTN deal expands M-Pesa access to 7 African countries

M-Pesa users can now send money through their mobile phones to recipients in seven African countries following the signing of an agreement with South African telecommunications company MTN.

This is according to Business Daily. British telecommunications giant Vodafone, which owns 40 per cent of Safaricom, has entered into a deal with MTN that will see their respective mobile money customers transfer money to each other across the seven Eastern African countries.

The inter-connect agreement between the region’s two biggest mobile money operators now enables convenient sending of cash between M-Pesa customers in Kenya, Tanzania, DRC and Mozambique, and MTN Mobile Money customers in Uganda, Rwanda and Zambia.

Under the terms of their memorandum of understanding, MTN Group and Vodafone Group will also share best practices and work together to define the rules and standards of mobile-based remittances in Africa.

“Our agreement with MTN to connect our mobile money wallets in East Africa is a fantastic example of co-operation and inter-operability between competing mobile operators.’’

“By working together, we will deliver cheaper, faster money transfers, improving the lives of many people living in the seven countries involved,” said Vodafone director of Mobile Money and founding Safaricom CEO Michael Joseph.

Since the Kenyan launch of M-Pesa in 2007, the service has gained great traction locally and internationally, raising the country’s profile as a mobile money service success story.

Kenyans, for instance, transacted Sh418 billion on their mobile phones in the past two months, according to latest data by the Central Bank of Kenya.

Safaricom has successfully grown its M-Pesa subscriber base to 19.95 million from 14.9 million in 2012.

The mobile money is transacted through a large network of agents that now stand at 80,335 from 39,401 in 2012.

“After successful launches in Ivory Coast and Benin in West Africa, we are looking enthusiastically at the collaboration with Vodafone in East Africa. Together, we aim to build a scalable model that will accelerate remittance roll-out across the continent,” said MTN Group head of mobile financial services, Serigne Dioum.

Following the Kenya success, several other affiliates of Vodafone have tried to replicate the service in their respective countries with varying levels of success.

Last year, Safaricom was granted a licence by the Central Bank of Kenya that opened the door for M-Pesa to offer outward cash transfer services it could not offer previously.

The firm’s cross-border operations had been restricted to inward remittances. The one-sided international cash transfer services only allowed it to move money into Kenya through partners such as Western Union and MoneyGram.

In the past year alone, the mobile money service has been introduced in Egypt, India, Lesotho and Mozambique.

In January, Mr Joseph had to step in to rescue the under-performing M-Pesa service in South Africa through a re-launch. Mr Joseph said the slow take-up in South Africa was because most people prefer credit cards.