M-Pesa is a mobile phone-based money transfer, financing and microfinancing service, launched in 2007 by Vodafone for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania.
Safaricom and Vodacom will cooperate to acquire the intellectual property rights to M-Pesa, the mobile financial services platform from Vodafone. The deal is worth a total of 12 million euros or USD 13.4 Million. “We are taking ownership of M-Pesa, the brand and the intellectual property. Joint ownership between us and Vodacom and we then use that as a platform into running into other markets across the continent,” Collymore told Reuters in an interview.
Safaricom currently pays 2% of its annual M-Pesa revenue. Revenue from M-Pesa was USD 741 Million in Safaricom’s finances at the end of March. Vodacom owns 35 percent of Safaricom and pays 5% in intellectual property fees to Vodafone from its M-Pesa business. “More important than the significant savings is about us determining the future, the roadmap of M-Pesa because at the moment the roadmap is determined by Vodafone,” Collymore said. “Given that the bulk of the M-Pesa business is in Africa, between Tanzania and Kenya, it is right for us to be determinants.”
The acquisition will allow the partners to develop local products. Shareholder and regulatory approvals are still required in South Africa. “We are putting everything in place just subject to getting the right approvals,” he said, adding the joint venture should be set up and the deal with Vodafone completed this year.