Safaricom’s latest annual report shows that M-Pesa accounted for half of the company’s profit before tax, outperforming voice and data.
Per the report, M-Pesa generated a total of $15.5 billion, which is 36% of the company’s revenue, and ended up contributing $423.8 million to its profit before tax, which is almost 50%.
This is not the first time M-Pesa is raking in jaw-dropping profit for Safaricom. In the previous fiscal year, M-Pesa accounted for 41.7% of the total profit before tax—$330.1 million.
How is the profit from M-Pesa increasing year-on-year while outpacing operational costs?
The report had some answers. It said that it was partly because of the increase in usage from Kenyans as a cashless service alternative.
Businesses have been won over by the convenience of mobile payment. It offers them higher transaction and wallet size limits and zero charges for cash transfers between mobile wallets and bank accounts.
Safaricom also said that it was able to grow that revenue because it extended the uses of M-Pesa beyond personal transfer to utility payments and loan acquisitions. The additional services required little capital expenditure, but service fees generated an outsized profit.
This is great news. Not just for Safaricom but also for other telcos like MTN, Airtel and others who are replicating the mobile money service in countries where they have strong market share.
Ghana
Indeed, in Ghana, MTN Mobile Money has also been recording some impressive performing, contributing significantly to its bottom line. In the first quarter of 2022, revenue from MTN Mobile Money grew by 26.7% to GHS515 million.
