According to local news reports, African fintech M-PESA is ramping up its expansion drive including a recent partnership with Amazon as it aims to expand beyond the African continent.
The mobile phone-based money transfer service is said to be targeting a two-way flow with the e-commerce giant as it seeks to gain a slice of a global remittances market, set to reach US$5.4 trillion by 2030.
With global money transfer markets forecasted to cross the trillion-dollar mark as soon as next year, the platform has reportedly been looking to a competitive international market that is currently dominated by traditional players such as Western Union and MoneyGram as well as existing banks in new countries.
Since its launch in 2007, M-PESA has made financial services accessible to millions of people who previously lacked access to traditional banking services and has transformed how people in Africa handle their money. It has also since expanded across the continent to Tanzania, Mozambique, DRC, Lesotho, Ghana, Egypt, Afghanistan, and South Africa. However, whilst there are still domestic opportunities, expanding into new, international markets is seen as a natural progression at this stage.
UN specialised agency, International Fund for Agricultural Development (IFAD) said remittance flow (US$605 billion) was more than triple the total amount of official international development assistance (US$178.6 billion)in the 2021/22 forecast period.
The Africa-based M-PESA is reportedly planning to split from Safaricom, its telecommunications parent company and run as a standalone financial service company, tackling global brands in the industry.
As an international fintech service, one of the benefits would be the ability of M-PESA to list on new stock markets and further its expansion through partnerships with local banks and mobile operators. These would help provide the platform in new markets.
At the same time, however, certain markets, like Europe, with highly developed financial systems and stringent regulations could require significant investment in research and development to convince both regulators and customers.
Already this year, M-PESA inked a deal with Nala, a Tanzanian fintech startup, to expand its International Money Transfer (IMT) services to the European Union (EU).
Last year, Safaricom and Visa launched the ‘M-PESA GlobalPay’ virtual card that enables customers to use M-PESA to shop at more than 100 million merchants across 200 countries for the first time.
