According to a report by Bloomberg, Kenya-based Safaricom is discussing the use of its mobile money service M-Pesa on Amazon's e-commerce platform.
This wouldn't be the first time Safaricom has collaborated with Amazon, as the two already partner on web services and the Kenyan company runs cloud sales for Amazon. The company also has a partnership with a unit of China's Alibaba Group Holdings Ltd. and PayPal Holdings Inc.
M-Pesa accounts for about a third of Safaricom's revenue, and East Africa's largest company sees the financial-technology product as the key to future growth. According to Bloomberg, it (M-Pesa) is "the jewel in its crown" thanks to the country's prevalent use of smartphones in lieu of traditional banking.
M-Pesa had around 20.5 million customers pre-pandemic, accounting for a quarter of Safaricom's annual revenue, according to PYMNTS. In 2019, that was $2.2 billion.
The whole picture changed when the pandemic started, with profit declining for the first time since 2011. "Net income dipped 6.8 per cent to 68.7 billion shillings ($642 million) in the 12 months through March." Bloomberg.
Bloomberg reported that "Sales from the service declined in the year through March after Kenya's central bank asked Safaricom to forgo some charges for nine months to discourage cash payments during the COVID-19 pandemic."
According to the report, the company's move to partner Amazon comes out of Safaricom's global expansion efforts to recover from its first profit decline in 10 years.
Kenya in Focus
GDP: $95.503 billion compared to South Africa's $351.432 billion in 2019
Population: 52,573,973 compared to South Africa's 58,558,267 in 2019
GDP per capita: $1,816 compared to South Africa's $6,001 in 2019