Financial services is becoming a meaningful business for Vodacom

VodaPay and other financial services offerings are playing an increasingly important role in Vodacom Group’s growth story, a trading update for the third quarter to 31 December 2021 shows.

The update, published on Tuesday before markets opened in Johannesburg, reveals that financial services revenue in the quarter rose by 12.5% to R2-billion, handily outpacing service revenue growth (voice and data, mainly) of 5.3%.

The launch of VodaPay in South Africa – Vodacom calls it its “super app” – saw strong adoption in the three months since its launch, outpacing the group’s expectations.

“Financial services remains a clear strategic priority for the group and this business continues to gain momentum,” said CEO Shameel Joosub in a statement accompanying the trading update.

“This is evidenced by the 12.5% increase in financial services revenue to breach the R2-billion mark for the first time in a quarter. Our M-Pesa platform, including Safaricom, continues to scale at an impressive rate with transaction values up 16.1% to exceed R430-billion/month.

“In South Africa, the launch of our VodaPay super app in October last year has exceeded our expectations by attracting 1.4 million downloads and a million registered users in its first three months. We see VodaPay as a precursor to M-Pesa’s evolution and further strengthening our fintech position across our footprint.”

Sustained demand

Revenue in the third quarter was up 6.4% driven by a sustained demand for connectivity and the growth of new services, including financial and digital services, the Internet of things and fixed lines, Joosub said.

“Our service revenue growth of 4.4% on a normalised basis was in line with the group’s medium-term target and supported by a resilient performance in South Africa on the back of sustained investment into technology and our network to further enhance customer experience.”

Vodacom invested R2.3-billion in its network in South Africa in the three-month period. It now serves 45.7 million customers in South Africa, an increase of 3.3% year on year.  – © 2022 NewsCentral Media