Telecoms operator Safaricom has echoed that it will not separate M-Pesa from its voice and data business.
This comes after pressure received from both a regulatory perspective and a stakeholder point of view with analysts seeing M-Pesa as largely an entity on its own.
Safaricom Chief Executive Officer Peter Ndegwa said that the pairing of Safaricom and M-Pesa has been complementary in driving the impact created by the telco.
“If you went to the streets and asked people which are the two or three brands they recognize, Safaricom and M-Pesa would be among them,” “We want to make sure that we use both franchises to improve customer lifestyles and how enterprises conduct their business. The link between the two is magic.” Ndegwa reported.
M-Pesa reached the Ksh.100 billion revenue milestone in the financial year ended March 2022, with earnings on the platform mainly driven by the return of fees on transfers of up to Ksh.1000. Moreover, in the previous year, Kenyan’s did a total transaction of Ksh.29.5 trillion on the platform.
M-Pesa now has more than 30 million active customers every month.
Analysts at Genghis Capital, noted that a separate M-Pesa unit would rake in more billions should Safaricom consider operating it as a stand-alone fintech.
“Such corporate action will be timely as it will allow further monetization of M-Pesa as a fintech platform- from mobile to a broader fintech proposition where there are a number of growth areas,” the analysts stated in a note last month.
The separation of M-Pesa was first proposed through the now-defunct Kenya Information Communications (Amendment) Bill which had a sort of check on Safaricom’s market dominance. However, lately the push to split the mobile-money platform has been moved from a business standpoint with a separate M-Pesa likened to leading global payment gateways such as Amazon Pay, Paypal, and Alipay.
Nonetheless, Safaricom does not see any significant benefit from splitting M-Pesa – its biggest revenue earner.
“M-Pesa is still run separately from product development to teams. We don’t see any real benefit from a split other than from an organization point of view,” added Mr. Ndegwa.
Besides, according to M-Pesa Africa Managing Director Sitoyo Lopokoiyit, M-Pesa will continue to discover new growth and value points through product innovation.
“Sometimes, it doesn’t have to be us launching a deliberate product. From the M-Pesa mini-app capabilities for instance, we already have the NSSF and Minet which are entities in wealth management and insurance respectively,” he said.