Firms will soon advertise on the M-Pesa app after Safaricom upgraded the mobile money platform to offer more features on top of payments and cash transfers.

The move comes after Vodacom Group, Safaricom’s parent company penned a deal with China’s Aunt Group which operates the popular mobile and online platform Alipay.

Safaricom will be following in the footsteps of other technology firms like Amazon which offers advertising as part of its online retail business.

Vodacom is implementing the Alipay app in South Africa and some of its features such as advertising will be built into the M-Pesa platform being rolled out in Kenya and Tanzania.

“In the case of Kenya and Tanzania in time, we will start to get merchants to expose their products into the M-Pesa app through the mini-app capability,” noted Shameel Joosub, Vodacom CEO last week.

“The concept is that of course, the more learnings and the more stuff we can develop in South Africa is what we will look to agree with Alipay to expand some of those services into the international markets on a case-by-case basis.”

According to Safaricom, the advertising feature will be the latest expansion of the Mpesa service which has for years expanded to be its biggest revenue earner.

The full Alipay app has a wide range of capabilities ranging from financial services, entertainment, shopping, merchant services and direct marketing

Most of these features are best suited for smartphones, with Vodacom saying it will use the learning experience in South Africa that has greater uptake of the high-end phones.

Advertising will be the latest addition to M-Pesa service which has grown to become Safaricom’s single biggest revenue earner. Started as a person-to-person cash transfer service, the service has tremendously grown to offer payments, credit, international remittances and business analysis and support.

In the half-year ended September, Safaricom recorded a 12.1 percent rise in net profit driven by revenue growth as the company brought back charges on M-Pesa transactions of less than Sh1,000.

Safaricom’s net profit in the period stood at Sh37 billion, up from Sh33 billion a year earlier. Sales rose 17.5 percent to Sh146.3 billion, with the mobile money platform M-Pesa providing the bulk of the revenue growth.

M-Pesa, which overtook voice last year to become the single largest business line, registered the highest revenue growth of 45.8 percent to Sh52.3 billion.

Charges on the mobile money platform for transactions of less than Sh1,000 were suspended to offer financial relief to customers and reduce handling of cash in the wake of the Covid-19 pandemic. Zero-rating of the transactions lasted from March 16, 2020 to December 31, 2020.


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