Joseph to spearhead M-Pesa expansion in Africa
Michael Joseph, the immediate former CEO of Safaricom, has been tapped to spearhead the expansion of M-Pesa to other African countries as part of a plan to have a seamless mobile money transfer service on the continent.
M-Pesa is already successful in Kenya, and is now also available in Tanzania, Afghanistan, South Africa, while a pilot service is on in India.
But Vodafone is looking at spreading the services to other African countries such as DR Congo, Lesotho, and Mozambique with the aim of linking the market.
This will see mobile phone consumers send and receive money across borders in a move that will pile pressure on traditional money transfer service operators such as Western Union and Money Gram who have lost market share in the local market.
Brand success
“I am busy with both my responsibilities as a director of Safaricom and the Vodacom group and with the potential international expansion of M-Pesa,” said Mr Joseph in an interview.
Sources at Safaricom said that Mr Joseph was picked for the M-Pesa rollout due to his experience in making the brand a success in Kenya — a feat that has seen the product achieve international recognition.
“M-Pesa is the most successful mobile money transfer service in the world and with Michael is a sure bet to drive its regional expansion having been behind its growth in Kenya,” said a senior executive at Safaricom who sought anonymity because he is not the firm’s spokesperson.
“The rollout of the service in the new territories will not automatically enable registered Kenyan subscribers to send or receive money.
“But there is a plan to link them to these markets in coming years,” said the source. At present, Safaricom subscribers can receive money from the UK directly to their mobile phones in transactions carried out in partnership with Western Union and Vodafone.
Mr Joseph retired from Safaricom in November after serving for 11 years and passed the leadership mantle to Bob Collymore.
He sits on the board of Safaricom and Johannesburg-based Vodacom, which is owned 65 per cent by the Vodafone Group — which has operations in five countries including South Africa, Tanzania, DR Congo, Lesotho and Mozambique.
It was under him that Safaricom rose to become East Africa’s largest and most successful firm in terms of earnings, and a market leader in Kenya’s mobile telephony market with a 76 per cent stake.
By 2005, Safaricom’s grip on the Kenyan mobile market had been cemented and in 2007 the company launched its mobile money transfer service M-Pesa — an innovation whose implementation was credited to Mr Joseph’s courage and which paid off handsomely winning over more than 13.5 million subscribers by September 2010.
Winning subscribers
Transactions worth Sh596.8 billion have gone through M-Pesa since its inception.
The service accounted for 11 per cent of Safaricom’s revenues or Sh5.2 billion in the six months to September this year up from Sh930 million in the same period in 2008.
Safaricom has used M-Pesa as a value added service, successfully using it to defend and attract subscribers from rival networks.
The service has driven a revolution of sorts in Kenya’s financial services where it is being used for payment of utility bills, dividend, goods at retail shops and banking services such as ATM withdrawals, deposits and cash transfers.
It is this market position that Vodafone seeks to replicate in five African countries served by Vodacom, especially DR Congo, Lesotho and Mozambique. Mr Joseph’s brief will be to shepherd the rollout of the product in the three countries and to shore up its performance in Tanzania and South Africa where the mobile money transfer service is yet to penetrate the market.
Low cost
The service was launched in South Africa in September and Tanzania in April 2008.
Nearly half (47 per cent) of all money transfers in Kenya now take place through the mobile phone, according to a survey by Financial Sector Deepening, a research firm that conducted the survey for the Central Bank of Kenya.
This has seen traditional money transfer service operators lose their grip on the market as more Kenyans turn to mobile phone-based platforms.
Popularity of the service is mainly hinged on the low cost of transaction, safety, and speed.
Mr Joseph succeeded Mr Grieves-Cook who had served as the KTB chairman for two consecutive terms since his first appointment in November 2004.
Under his chairmanship, KTB managed to put up aggressive marketing campaigns targeting domestic and international tourists.
In addition, the organisation partnered with international travel and leisure groups as well as the media and airlines to build a strong image for Kenya as a niche tourist destination.
