M-Pesa, a Safaricom fintech service, is dipping its toes into the remittance business through a partnership with eCommerce giant Amazon.
Through its mobile money service, M-Pesa, which was founded in 2007, has grown to become a significant provider of financial services in the East African region. The business reported in September 2021 that it has 50 million monthly active subscribers.
In addition to Kenya, which has more than 30 million users, the service is also offered in Tanzania, Lesotho, Ghana, Mozambique, Egypt, and the Democratic Republic of the Congo. M-Pesa, which has 51 million customers as of now, enables users to transact business worth more than $314 billion yearly.
Furthermore, it is in charge of 20% of remittances to Tanzania and 60% of remittances to Kenya.
M-Pesa Takes Into Account The Remittance Sector
As a function of its success in the mobile money sector, it is currently evaluating the remittance industry. The remittance industry in low- and middle-income nations expanded by 5% to $626 billion in 2022, according to the World Bank, providing an opportunity for players like M-Pesa.
Yet, the expansion won’t be simple because Western Union and MoneyGram continue to pose a threat. As a result, preparations to separate the fintech giant from its parent firm, Safaricom, are in motion since analysts think that M-Pesa is badly impacted by Safaricom’s declining share price.
Due to its separation from Safaricom, the fintech giant will be able to draw in new investors, claims Aly-Khan Satchu, CEO of Rich Management Ltd.
“I believe that a spin-off will benefit shareholders, draw in a new group of foreign investors, and enable effective capital allocation into M-Pesa. The overall share price of Safaricom is currently a drag on the M-Pesa valuation”.
M-pesa To Be A Payment Method On Amazon
The companies have already discussed a relationship, which will be with Amazon. According to Bloomberg, the two giant businesses have been in conversation since 2021, about adding M-Pesa as a payment option on Amazon.
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