Safaricom mulls M-Pesa partnership with Amazon
Safaricom, the owner of Sub-Saharan Africa’s mobile money provider M-Pesa, is reportedly in talks with Amazon to integrate M-Pesa to the Big Tech’s e-commerce platform.
According to Bloomberg, the talks are an effort by the Kenyan firm – whose revenue is around one third M-Pesa – to bounce back from its first profit decline since 2011.
In the last year, Safaricom’s net income dipped 6.8% to $642 million. The decline followed rules imposed by Kenya’s central bank insisting Safaricom pause digital payment charges for nine months, so consumers could use less cash during the pandemic.
Bracing for the cloud
Safaricom already has partnerships with Alibaba and Paypal. And it works with Amazon to run the e-commerce giant’s cloud sales out of Nairobi.
The mobile operator’s CEO, Peter Ndegwa, says a wider partnership with Amazon “is important […] as we go into new areas such as cloud”.
Payments on M-Pesa are made via SMS utilising unstructured supplementary service data (USSD) technology, meaning anybody with a mobile phone can use the service.
Last month, Safaricom – which is the largest mobile operator in Kenya – signed a partnership deal with payments giant Visa.
The deal will see the pair work on the development of new products and services supporting digital payment for customers of Safaricom’s M-Pesa micro-finance and payments platform.
The partnership will cover over 24 million M-Pesa customers, more than 173,000 M-Pesa merchants from Safaricom and more than 61 million merchants on Visa’s network.
The drive for new partnerships follows Vodacom’s and Safaricom’s completion of their acquisition of M-Pesa from Vodafone at the beginning of April.
Safaricom is also part of a consortium – including Vodafone – bidding for one of two new telecommunications licences in Ethiopia.
This would allow the firm to launch mobile-money services after one year in the east African country. Initially, the central bank has reserved this right for state-owned Ethio Telecom.