Mobile-based money transfer service M-Pesa is in talks with Amazon to integrate an M-Pesa payment option into the global eCommerce giant’s platform, allowing users to pay for items in the checkout through M-Pesa, however just when the integration will be confirmed remains uncertain. It is speculated that this partnership is part of an effort to place M-Pesa as an international payment method and service and expand its global footprint to increase revenue.
When the Kenyan government decided to enforce free transactions on M-Pesa during the COVID-19 pandemic, M-Pesa’s revenue fell by 2.1% in the first half of 2020. However, the mobile money service bounced back in Q4 of 2020 when free transactions were ended.
M-Pesa, owned by Kenya’s Safaricom and South Africa’s Vodacom, both giant telecom companies, does already work with Amazon, managing its local sales, and is already partnered with Visa, PayPal, and Chinese online shopping service AliExpress. It is available in seven African countries: Egypt, the Democratic Republic of Congo, Tanzania, Lesotho, Kenya, and Ghana, and has a user base of over 40 million. According to Safaricom CEO Peter Ndegwa, a successful partnership between M-Pesa and Amazon will strengthen collaboration between the corporations, and that in the future it will pursue partnerships with Facebook and Google.
One problem that this partnership will not solve, unfortunately, is the price of Amazon delivery to African countries. Although integrating an M-Pesa option into Amazon’s payment platform will be a gamechanger in terms of making payments easier for many, there is a separate issue for African residents who order from Amazon: high shipping prices. Most items on the retail website do not ship directly to the continent or, if they do, delivery is not cheap. This means delivering to Africa usually involves third-party importers, which is much pricier.