Vodacom’s fintech arm flourishes, processing R23 billion daily

Vodacom Group has reported a significant surge in its financial services business, processing an average of R23 billion in mobile money transactions daily during the quarter ended December 31, 2024. This highlights the growing importance of fintech within the company’s revenue stream.

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Financial services contributed R3.6 billion to the group’s total revenue of R39.5 billion for the quarter. This segment demonstrated strong growth, with revenue increasing by 5.7% year-on-year (17.2% on a normalized basis), outpacing the 11.6% growth in core communications service revenue.

Vodacom’s key markets, South Africa (R889 million) and Egypt (R581 million), showed significant growth in fintech revenue. The international fintech business also experienced robust growth, driven by M-Pesa’s success in Tanzania and Lesotho.

The company is strategically focusing on expanding its “advanced financial services” portfolio, including loans, savings, remittances, and insurance. These services now account for 44% of M-Pesa revenue.

Vodacom’s “super apps,” such as VodaPay, Vodafone Cash, and M-Pesa, are crucial to this strategy, integrating Vodacom’s services with partner offerings. A robust agent network, which grew by 35% to 454,000 agents, supports core financial services like cash-in and cash-out.

This move into fintech reflects a broader industry trend. Both Vodacom and its rival, MTN Group, are diversifying their revenue streams beyond traditional telecommunications to mitigate the impact of declining margins in the core connectivity business. MTN also reported strong fintech growth in its recent half-year results, with a 27.7% year-on-year increase in fintech revenue and a 58.2% growth in advanced services revenue.

For the quarter, Vodacom Group reported revenue of R39.5 billion, a 1.6% year-on-year increase (12.6% normalized). South Africa contributed 4.7% to this growth.