NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, December 1, 2014

Vodacom is in talks with small and big companies with the aim of getting them to use its mobile payment platform, m-pesa, to pay salaries to employees and allow customers to pay for goods using the system.

M-pesa is taking on traditional banks as it provides similar products and services to clients at a significantly lower fee.

Vodacom relaunched m-pesa in August and has so far signed up 650,000 customers. It is targeting 10-million mobile money customers in the next five years. The system lets users transfer cash, make payments and buy airtime using their cellphones.

But Vodacom’s strategy is to add more services such as buying flight tickets, prepaid electricity and also make transactions from online stores. A cross-border money transfer may also be added. The new m-pesa comes with a chip-protected Visa card that can be used to withdraw cash from cash machines and make payments at till points.

So far, m-pesa is being used by a company in the creative industry to pay for salaries. Eduloan, the education finance and bursary administration provider, is allowing students to pay for educational and daily expenses from their bursary cash stipends by using m-pesa’s mobile wallet.