Four years after pulling the plug on its M-Pesa platform in South Africa, Vodacom is having another go at fintech and mobile payments in its biggest market, this time in partnership with Chinese giant Ant Financial Services Group.
Ant Financial Services, which was formerly known as Alipay – also the name of its biggest product – is an affiliate of Chinese e-commerce giant Alibaba Group. The Vodacom deal is the first time it has licensed the Alipay technology platform to a third party without taking an equity stake in the venture, said Vodacom Group CEO Shameel Joosub.
The decision to launch Alipay services in South Africa – in the form of what Vodacom calls a “super app” – comes just over four years after the mobile operator gave up on M-Pesa in its biggest market, despite its success in other markets in which its operates, including Kenya (where sister company Safaricom pioneered M-Pesa) and Tanzania.
Vodacom decided to pull the plug on the local version of M-Pesa after it failed to achieve a “critical mass of users”. Rival MTN South Africa ended its mobile money service soon after, though the company earlier this year launched a revamped and improved MoMo offering to local consumers.
Joosub described Vodacom’s deal with Ant Financial as a “significant milestone for Vodacom Group, and in particular for Vodacom Financial Services”, a division that already contributed over R1-billion/year to the group’s profit.
The Aliplay platform will only be available in South Africa, with other Vodacom markets continuing to offer M-Pesa. The Aliplay “super app” will be available to all South Africans, though Vodacom customers will get rewarded with airtime and data and other incentives, while their access to the platform will be zero-rated for data usage.
Vodacom said the Alipay app will offer a “marketplace of goods and services tailored to South African customer needs”. This will be “underpinned by a progressive digital payments ecosystem designed to serve both the banked and unbanked parts of the population”.
“Customers and merchants will all find each other on one affordable platform, operated by Vodacom Financial Services, with Alipay as the technology provider,” it said.
Joosub said the Alipay deal will accelerate Vodacom’s financial services aspirations across Africa. “We already offer South African customers an ecosystem of innovative digital financial services products, but this technology partnership with Alipay will enable us to be on par with leading global digital counterparts quicker and more efficiently,” he said in a statement.
The mobile payment platform will also be integrated into Vodacom’s VodaPay point-of-sale devices, offering merchants a single payments processing solution for physical and mobile commerce.
“In addition to the benefits associated with accessibility and affordability, there will also be support offered to the SME businesses such as bespoke, programmatic advertising as well as real-time and direct marketing solutions — all zero-rated for customer consumption,” Vodacom said. — © 2020 NewsCentral Media