Monday, May 27, 2024

Sérgio Gomes: ʺM-Pesa is the largest mobile wallet service in the country and has more than 6 million active customersʺ

M-Pesa is the largest mobile wallet service in the country. It currently has more than 6 million active customers and a network of more than 60,000 active agents. The goal is to cover 75 percent of the adult Mozambican population by 2025.

During the interview session with the General Manager of Vodafone M-Pesa, a subsidiary of Vodacom Mozambique, Sérgio Gomes spoke about the challenges facing the fintech company over the 11 years of its existence and Vodafone M-Pesa’s positioning to recover assets, given that some users do not honor their commitments.

Profile Mozambique: We are celebrating 11 years of the M-pesa platform this year. In this growth, what can we expect in terms of social responsibility in the country?

Sérgio Gomes: The way we have helped and supported families in their economic activities and empowered these activities over the last 11 years has had a social and developmental impact, elements that express our social responsibility.

On the other hand, our fundamental purpose is financial inclusion and giving all Mozambicans access to financial services.

Note that when we are launching direct fnancing financial products, digital insurance and direct access for people and savings services, all of this contributes to giving access to financial services to everyone, and this is part of our social responsibility.

PM: How does Vodafone M-pesa, a fintech regulated by both the Bank of Mozambique and INCM due to its association with Vodacom, maintain its independence in the face of the measures implemented by the Central Bank?

SG: Vodafone Mpesa exists as a company, it practically came into being when the M-pesa service was created, so the company is 100% owned by Vodacom. However, the company operates completely independently, it has its own governing bodies, decisions are taken professionally and our activities are determined by the strategies that are outlined internally.

Now, there is a whole strategic partnership with vodacom, which is fundamental for us. The company was born in Vodacom, lives next to Vodacom and empowers Vodacom just as Vodacom empowers M-pesa. But in regulatory terms we have a specific relationship which is coordinated by the Bank of Mozambique, unlike Vodacom where the regulator is INCM.

PM: Cases of fraud and cyber attacks persist and many users have shown concern about the security of this fintech. What strategies have been adopted to control this situation?

SG: Fortunately, as M-pesa we haven’t had any cyber attacks, whether small or large-scale. The way we have built our cyber security defense, the way we have defined policies and execute them on a daily basis, and the responsibility we have as an international group, has allowed us to have a very strong defense and therefore avoid any kind of attack, even though attempts may occur.

Now, with regard to fraud, the cases reported have to do with the phenomenon called Social Engineering. The most common fraud that everyone should experience is simply receiving an SMS asking for that amount to be sent.

We have taken very specific measures and created very specific systems over the last 12 months that have reduced this substantially, and when I say substantially, I mean very substantially. And I think this experience has been very common. If a year ago we would have received 10 or 20 of these messages in a year, today we receive one in a new number, because we monitor these contacts and take action. And we will continue to take responsibility for these controls. And for any other type of fraudulent activity or fraudulent attempt towards our customers.

PM: What is Vodafone M-pesa’s strategy for recovering assets, given that so many people don’t honor their commitments?

SG: Just as we have people who don’t pay, there are a few, we have a substantial majority of people who pay on time and who use the product responsibly. And when I say a substantial majority, we’re talking about what we have today, and I can disclose this figure, an NPO, which is what we call the product price, of around 4%. It’s even below the average of all financial NPO standards. The difference is that this is a top product, so it’s very well known.

We have to give a voice to the people who make responsible authorizations and for whom the existence of this product makes a big difference. I can assure you that every day there are small, informal entrepreneurs who use this product to boost their business, to be able to buy more products, to make their sales during the day, to increase their sales and at the end of the day they honor their payment.

There are also emergency situations in which people who wouldn’t have the chance to buy medicine, or wouldn’t have the chance that day to feed themselves, manage to make use of this product and use it, because it even saves their lives, and at the end of the day they pay for this product responsibly.

PM: The country has introduced various measures to combat money laundering, especially the financing of terrorism. How does M-pesa stand on this issue?

SG: Regarding this issue, I’m pleased to say that we have made a substantial investment in creating a whole line of defense against money laundering and terrorist financing. Whether it’s with the people we hire for these units.

And even the responsibility we have brought to our governing bodies, who are the ones most responsible for this guarantee activity, that we have the right policies, and that we have the right team to do this as well. And also an investment in systems and models to be able to control transactions and to be able to see where the hotspots of possible capital guarantees are, which we are sometimes aware of.

Our transactions today are extremely secure. We are even able to identify the sources of risk at any given moment, and we can carry out this analysis. And yes, of course, we have a very special eye on the region with the regions that are the highest risk, on monitoring the transactions that there are now, to see if at any point we are at risk or not.

In general terms, the company has very strict compliance procedures and with the systems we have, we are a barrier and a defense to ensure that transactions can be carried out at a certain time, so that there is a transfer limit per day.

Vodafone M-Pesa Board of Directors

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