Mobile Payments Mean Big Chunk of Safaricom Revenue
We’ve been hearing a lot about Safaricom and its work with MPESA over the last couple of years now, and new word has emerged to show just how much impact MPESA is having on Safaricom’s bottom line. A look at the last three fiscal years illustrates this point wonderfully, as MPESA takes over a progressively larger chunk of bottom line generation.
In fiscal year 2016, the reports noted, MPESA represented 23.3 percent of service revenue. Not half bad in and of itself, but the news only got better from there. In fiscal year 2019, that number rose to 31.2 percent, which means that almost a third of Safaricom’s service revenue is generated by mobile payments.
Interestingly, other mobile systems fluctuated accordingly. Data services, both mobile and fixed, increased their revenue generation, while voice outgoing and SMS dropped significantly. It’s a pattern that’s been echoed throughout a lot of the mobile industry over the last few years, and it’s little surprise to see it at work here.
MPESA revenue, Safaricom noted, reached 74.99 billion in local currency, thanks to several separate factors working together. Those factors included not only an increased total number of users, but also a growth of use cases for the product itself. Further cited was a “higher velocity of funds within the ecosystem,” which suggests there are more ways to use the service and more people using it.
Reports even suggest that, within the next three years, MPESA will represent more revenue than the rest of the business put together. That might be a bit optimistic, but MPESA is on track to represent a big part of Safaricom’s operations.
It’s a demonstration of just how big the mobile payments concept is getting. It’s a major part of revenue for a wide range of companies, and Safaricom has watched its own mobile payments platform grow by leaps and bounds. Sure, there are some differentiating factors among markets—mobility in general has long been big business in Africa thanks to the low penetration rates of personal computers—but mobile payments are catching on to one degree or another everywhere you look.
As we see more use cases for mobile payments, and more people willing to put these tools to use, we’ll only see mobile payments gain further ground. The next few years may well prove huge for mobile payments.