M-Pesa, Safaricom’s highly-regarded mobile money remittance service has signed a new strategic partnership with American e-commerce giant Amazon to provide global remittance services.
Safaricom had hinted about this partnership in May 2021 saying the move was part of its efforts to expand its global reach and bounce back from a first profit decline in a decade.
According to the UN, global remittances are set to reach over USD 4 trillion by 2030, and M-PESA is targeting a two-way flow with its recent partnership with Amazon, aiming to expand beyond the African continent.
This comes at a time when M-Pesa is set to split from its parent company Safaricom and operate as a stand-alone. It is projected that such a move would give M-Pesa more leverage in the money market given that its operations are already well-grounded in several markets around the world.
By signing a new partnership with Amazon, the fintech is looking to expand its business across Europe and could benefit from backup from Vodafone and Vodacom, Safaricom’s global shareholders to penetrate the rather robust European markets and distinguish itself from traditional banks.
On the international front, M-Pesa will be competing with established giants such as Western Union, Money Gram, World Remit, and Remitly. There are also new entrants such as Nigeria’s Flutterwave and ChipperCash as well as Kenya’s Waya Money, Waya, an African-focused digital banking app based in Washington DC.
Safaricom has been leveraging on such partnerships to expand its portfolio while solving remittance services for the continent. In 2018, the telco inked a partnership with PayPal, making it possible to make withdraws and deposits from either platform.