Companies

Vodafone unveils pre-paid card linked to M-Pesa in South Africa

m-pesa

A Safaricom agent carries out an M-Pesa transaction. Vodafone said users can pick their cards at any of its 8,000 agents in South Africa. PHOTO | FILE

Summary

  • Vodafone, which owns a 40 per cent stake in Safaricom, has partnered with Visa to develop the chip-and-pin cards.
  • The card links customers’ mobile wallets to the plastic card, allowing for ‘tap-and-go’ payments, which steps up the telcos’ battle with commercial banks for control of retail payments.

British telecommunications firm Vodafone, which is Safaricom’s largest shareholder, has rolled out a prepaid card linked to M-Pesa in South Africa, indicating also that a similar launch could happen in Kenya.

The newly unveiled M-Pesa card links customers’ mobile wallets to the plastic card, allowing for ‘tap-and-go’ payments, which steps up the telcos’ battle with commercial banks for control of retail payments.

Vodafone, which owns a 40 per cent stake in Safaricom, has partnered with Visa to develop the chip-and-pin cards.

Gemalto, a Netherlands-based card maker, provided the security solution for the M-Pesa card to ensure it is acceptable at payment terminals across the globe.

“By expanding our M-Pesa mobile wallet offering with the banking card, we’ve (added) an entirely new level of functionality,” said Herman Singh, managing executive of m-commerce at Vodacom.

“It gives users the freedom to make payments for goods and services without the need to carry cash.”

The Visa-branded M-Pesa prepaid card comes at a time when Safaricom has embarked on enlisting merchants to accept M-Pesa payments as a strategy to tap into the lucrative retail payments.

READ: Safaricom targets Nakumatt, Tuskys for Lipa Na M-Pesa

The ‘tap-and-go’ M-Pesa-linked cards could help Safaricom to cut reliance on peer-to-peer mobile transfers, which is high volume but low profit margin.

“This innovative deployment highlights just how quickly the worlds of banking, retail and mobile communications are changing,” said Thierry Mesnard, senior vice president for Africa at Gemalto.

Betty Mwangi, Safaricom general manager in charge of financial services, said the model is likely to be replicated locally but added that the South African market varies from Kenya’s.

“The model in South Africa is different because it is a card-based payments economy,” she said in a telephone interview. “We’ll likely introduce it in Kenya but it won’t exactly be like what it is in South Africa.”

However, Ms Mwangi declined to give further details.

Vodafone said users can pick their cards at any of its 8,000 agents in South Africa.