Vodacom sees fintech opportunity with VodaPay ‘super app’

Vodacom Group is expanding its financial and e-commerce services in South Africa through a partnership with AliPay, seeking to accelerate growth in a market hampered by a lack of new broadband spectrum.

Africa’s largest wireless carrier by market value has developed a so-called “super app” with Alibaba Group, which will allow customers to take out loans and shop online as well as make standard mobile payments, according to a statement on Tuesday. The service, to be launched under the VodaPay brand in South Africa, will be available in coming weeks.

“The world is moving towards e-commerce, and while leveraging off what we already have, we also need to grow that side,” Vodacom CEO Shameel Joosub said on a call with reporters.

Vodacom, majority owned by the UK’s Vodafone Group, is looking to expand its fintech offering in South Africa while waiting for a long-promised auction of spectrum, which it says is needed to expand broadband service and bring down prices.

The auction process is currently bogged down in legal action taken by Vodacom’s rivals, MTN Group and Telkom, which object to how the sale has been conducted.

Safaricom, too

Vodacom’s push into e-commerce will be replicated by Kenyan partner Safaricom, whose M-Pesa mobile money service accounts for about a third of revenue. While the super app will be available to South African customers, M-Pesa will start to offer more online retail and financial services in other markets such as Tanzania, Joosub said.

Mobile operators in Africa have invested heavily in fintech to fill a gap left by a lack of physical banking infrastructure. MTN is looking to carve out and possibly list its financial services business, while Airtel Africa is looking at similar options.  — (c) 2021 Bloomberg LP