The move comes out of Safaricom’s global expansion efforts to recover from its first profit decline in 10 years, according to the report.
“M-Pesa accounts for about a third of Safaricom’s revenue, and East Africa’s largest company sees the financial-technology product as key to future growth,” the report stated. “The carrier already has partnerships with a unit of China’s Alibaba Group Holdings Ltd. and PayPal Holdings Inc.”
This wouldn’t be the first time Safaricom has collaborated with Amazon, as the two already partner on web services, and the Kenyan company runs cloud sales for Amazon., according to the report.
Safaricom is easily the biggest telecom company in Kenya and the surrounding area, Bloomberg reported, calling M-Pesa “the jewel in its crown” thanks to the country’s prevalent use of smartphones in lieu of traditional banking.
Pre-pandemic, M-Pesa had around 20.5 million customers, accounting for a quarter of Safaricom’s annual revenue, according to PYMNTS. In 2019, that was $2.2 billion. Then the pandemic happened.
“Sales from the service declined in the year through March, after Kenya’s central bank asked Safaricom to forgo some charges for nine months to discourage cash payments during the COVID-19 pandemic,” according to the report. “That contributed to the carrier’s first decline in annual profit since 2011. Net income dipped 6.8 percent to 68.7 billion shillings ($642 million) in the 12 months through March.”
As PYMNTS reported in March 2020, Safaricom made all transactions under 1,000 Kenyan shillings (about $10) free for 90 days after President Uhuru Kenyatta said the country needed “to explore ways of deepening mobile money usage to reduce risk of spreading the virus through physical handling of cash.”
The company also announced at the time that small- to medium-sized businesses (SMBs) would be able to increase their daily transaction limits on M-Pesa from 70,000 shillings to 150,000 shillings, (about $700 to $1,500).
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