Vodacom and Safaricom have announced they have jointly completed the acquisition of the MPESA brand, product development, and support services from Vodafone.
This acquisition was reported last year where they wanted to purchase MPESA rights for Kshs 1.3 billion. This was intended to make them make significant savings in royalties paid to Vodafone and enable them to expand the service to other markets.
“For Safaricom, we’re excited that the management, support and development of the M-Pesa platform has now been relocated to Kenya, where the journey to transform the world of mobile payments began 13 years ago. This new partnership with Vodacom will allow us to consolidate our platform development, synchronize more closely our product roadmaps, and improve our operational capabilities into a single, fully converged Centre of Excellence.,” outgoing Safaricom CEO, Michael Joseph said.
Safaricom was paying 2% of its annual MPESA revenue to Vodafone as royalties. Safaricom made Kshs 75 billion in their last full financial year, which means they paid Vodafone Kshs 1.5 billion as royalties. Vodacom also pays 5% as intellectual property fees to Vodafone for its MPESA business that is mainly in Tanzania.
MPESA has 40 million users in the continent where Kenya supplies the majority of users. It is operational in Kenya, Tanzania, Lesotho, DRC, Ghana, Mozambique and Egypt. Vodacom and the Government of Kenya each have an equal shareholding of Safaricom (35% each) and the rest was offered during the IPO.
This news also comes after Ethiopia opened the floor for mobile money in the country and the country has been a keen prospect for MPESA due to its large population (over100 million people).