M-Pesa inks deal to boost funds transfer in Ethiopia

Safaricom’s M-Pesa has signed money transfer agreement with Onafriq, a digital payments network to help streamline remittance flows into Ethiopia.

Nika Naghavi, Onafriq Group’s Head of Growth said the remittance service has been authorised by the National Bank of Ethiopia, and will start in July 2023. Onafriq is one of Africa’s largest digital payments networks operates in 40 African countries.

The partnership, which will leverage Onafriq’s extensive network, connecting 500 million mobile money wallets and 200 million bank accounts is expected to boost M-Pesa revenues beyond the $885.12 million (Sh116.8 billion) achieved in the financial year ended March 2023.

Naghavi said the partnership will also accelerating Ethiopia’s “Digital Ethiopia 2025” strategy.

The collaboration will focus on developing digital systems, promoting financial inclusion, innovating the banking sector, and implementing innovative solutions, thus propelling digital transformation across Ethiopia.

The firm, Naghavi stated has always believed that payments should be a simple process, as simple as a phone call – connecting individuals through increased access.

“The agreement with M-Pesa Safaricom extends our reach in Africa even further and strengthens our position as the largest payment network on the continent,” she said in a statement.

“We are confident that this partnership will positively impact economic growth and the achievement of greater sustainable development goals,” Naghavi added.

M-Pesa has been strategically restructured to enhance and expand its services. In addition to forming partnerships, M-Pesa has embraced technology, integrating with Microsoft Azure and paving the way for the launch of new cloud-native applications.

The integration is part of a broader 10-year strategic partnership with Vodafone, targeting Europe and Africa.

Range of services

M-Pesa has also broadened its services beyond just money transfer and now offers a range of services including consumer and business super apps, overdraft services through Fuliza, and global remittance services via M-Pesa Global.

These strategic changes have enabled M-Pesa to scale up its services, reach a wider audience, and contribute significantly to financial inclusion and economic growth in Africa.

According to Statistica, a global data and business intelligence platform, the money platform has been experiencing steady revenue growth, from $69.99 million (Sh9.3 billion) in 2011 dipping once in 2022 to $765.12 million (Sh100.9 billion) from $781.7 million. (Sh103.2 billion).

Ethiopia receives over $5 billion (Sh660 billion) in remittances annually. The collaboration will provide the Ethiopian Diaspora with a quick and straightforward formal channel to send money to their loved ones in Ethiopia, thereby simplifying the payment process.

Safaricom Telecommunications Ethiopia was officially granted the license to operate mobile money services in Ethiopia early last year.

The M-Pesa license was expected to open the country to the world’s largest mobile payment system and Africa’s largest Fintech, and the world’s first mobile money transfer system.