Safaricom (NSE:SCOM) saw further growth in the value of M-Pesa transactions in the quarter ended December, boosting revenue for the telecom operator which now derives the bulk of its sales from the financial service.
M-Pesa’s performance during the reporting period was disclosed by Safaricom’s parent company, Vodacom Group.
“Our M-Pesa platform, including Safaricom, continues to scale at an impressive pace with transaction values up 16.1% to exceed R430 billion (3.2 trillion shillings) per month” , Vodacom said in its third-quarter earnings announcement.
Safaricom, which only reports half-yearly (through September) and annual (through March) results, accounts for more than half of mainland M-Pesa transaction values.
Growth in transaction value means more revenue for the telecom operator, particularly after the company resumed charging for most M-Pesa transactions from January last year.
M-Pesa is also available in other countries – Tanzania, Mozambique, Lesotho and the Democratic Republic of Congo (DRC) – through Vodacom-owned subsidiaries.
Safaricom and the multinational also manage the M-Pesa Africa joint venture, designed to expand the mobile financial services platform beyond existing markets served separately by the partners. There are now 51.3 million M-Pesa users across Africa.
The Nairobi Stock Exchange-listed company is expected to announce its results for the full year ending in March in mid-May.
The telecom operator posted a 12.1% jump in net profit in the six months to September, helped by revenue growth as the company reinstated fees on M-Pesa transactions under 1,000 shillings.
Fees have however been reduced under the agreement with the Central Bank of Kenya (CBK) which regulates financial services.
Safaricom’s net profit during the period was 37 billion shillings, up from 33 billion shillings a year earlier.
Sales rose 17.5% to 146.3 billion shillings, with mobile money platform M-Pesa leading the revenue growth.
M-Pesa, which overtook voice last year to become the largest line of business, posted the strongest revenue growth of 45.8% to 52.3 billion shillings.
Fees on the mobile money platform for transactions below 1,000 shillings have been suspended to provide financial relief to customers and reduce cash handling in the wake of the Covid-19 pandemic.
The transaction tax exemption lasted from March 16, 2020 to December 31, 2020. Safaricom plans to expand its mobile money service to Ethiopia where it is setting up operations after leading a consortium that won a telecommunications license on this market.