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Weekly Catchup: Capitec and Stitch Launch VRP and Vodacom Goes on a safari

What you missed this week

Author

Elly Ngoma
December 07, 2025

Forget "New Year, New You"- December is delivering "New Owner, New Revenue" as Vodacom dropped R36 billion to buy control of M-Pesa's Kenyan mothership. You can’t make this stuff up. Meanwhile, Stitch and Capitec just gave credit cards another reason to panic by launching South Africa's first Variable Recurring Payments.

Pour yourself something strong: this week was a masterclass in why African fin. services moves faster than regulatory frameworks can keep up.

GOLDEN NUGGETS

  • Vodacom's R36bn Safaricom bet: Telco giant acquires additional 20% stake to reach 55% ownership of Kenya's fintech powerhouse, consolidating revenue toward R220bn

  • Stitch & Capitec launch SA's first VRP: Variable Recurring Payments give 25M+ Capitec customers alternative to credit cards for subscriptions with pre-approved transaction limits

  • Morocco's fintech IPO milestone: Cash Plus becomes first listed fintech on Casablanca Stock Exchange at $550M valuation, profitable with $21.5M net income

  • Zazu tackles SME 'missing middle': South African startup raises $1M to build "Mercury-style" banking for Africa's underserved small businesses with 50+ beta users

  • Stripe's AI acquisition: Payments giant acquires Metronome to enhance usage-based billing capabilities, betting metered pricing is "the native business model for the AI era"

ONE BIG THING

TELECOMS

1. Vodacom Drops R36 Billion to Control Africa's M-Pesa Machine

What’s happening? Vodacom Group has announced a blockbuster transaction to acquire an additional 20% stake in Safaricom PLC for $2.1 billion (R36 billion), increasing its ownership from 35% to 55%. The deal, structured as a 15% purchase from the Government of Kenya and 5% from Vodafone at KES34 per share, will give Vodacom control of one of Africa's most valuable fintech assets. If you have no clue what I’m talking about, read on.

Why it matters: This isn't just a telco buying another telco. Safaricom is the custodian of M-Pesa, Kenya's mobile money juggernaut that processes over $1 billion daily, across 60 million users. Yes, I said daily. M-Pesa essentially created the blueprint for financial inclusion in Africa - launched in 2007, it's now older than most fintech unicorns and vastly more profitable. Vodacom is betting that controlling Safaricom's fintech engine will turbocharge its Vision2030 strategy.

State of Play: Once regulatory approvals come through from Kenya, Ethiopia, and South Africa, Safaricom will transition from being an associate to fully consolidated on Vodacom's books. This accounting shift will push Vodacom Group's revenue toward R220 billion (~$11 Billion). Safaricom remains listed on the Nairobi Stock Exchange, with the Kenyan government retaining 20% and board representation.

Catch Up: Safaricom isn't just riding the M-Pesa wave. The company combines telecommunications, fintech, and enterprise services with industry-leading margins and resilient cash generation. It's expanding into Ethiopia - a market of 120 million people - while growing cloud, IoT, and enterprise offerings. Vodacom has been a partner since Safaricom's beginning and clearly sees untapped potential in scaling these services across its pan-African footprint.

Zoom In: The strategic brilliance here is twofold. First, Vodacom gains operational control over M-Pesa's innovation pipeline - some lessons learned in Kenya can be deployed across Vodacom's markets in South Africa, Tanzania, DRC, Mozambique, and Lesotho. Second, Ethiopia represents a massive greenfield opportunity. While Safaricom's Ethiopian rollout has faced challenges, controlling ownership lets Vodacom make long-term bets without shareholder pressure for quick returns.

Be smart: So Kenya needs cash for infrastructure but doesn't want to hit citizens with tax hikes. Selling 15% of Safaricom nets the government $1.6 billion while retaining significant ownership. For Vodacom, this is a rare chance to lock in control of Africa's most successful fintech platform before someone else does. Don’t fight me. Watch how Vodacom integrates Safaricom's fintech playbook - if done right, this could redefine mobile money across the continent. If mishandled, they've just overpaid for an asset they already partially owned. I’m betting my money on the former though.

FINTECH

2. Stitch and Capitec Just Killed Another Use Case for Credit Cards

South African payments infrastructure company Stitch has partnered with Capitec Bank to launch Capitec Pay Variable Recurring Payments (VRP) - billed as South Africa's first VRP offering. The product allows Capitec's ~25 million active customers to make recurring payments directly from their bank accounts, offering an alternative to credit cards for subscriptions, logistics services, mobile contracts, and e-commerce.

Why it matters: Credit cards have dominated recurring payments because they're super convenient - set it and forget it. But they're expensive for merchants (interchange fees eat 2-3% of revenue) and exclude millions of South Africans who don't qualify for credit. VRPs on the other hand, flip the script: customers pre-approve variable amounts with maximum transaction limits, then payments pull directly from bank accounts without needing authorisation each time.

State of Play: With Capitec Pay VRP, customers authorise an initial setup via the Capitec app, including a per-transaction spending cap. Once configured, merchants can debit accounts on a recurring schedule without requiring approval for each charge. Most importantly, amounts can vary (hence "variable") - perfect for usage-based billing like data plans, utilities, or delivery services. Customers can pause or cancel anytime, giving them control traditional debit orders lack.

Catch Up: Stitch, founded in 2021, has become one of South Africa's largest payment service providers, raising $107 million in total funding including a $55 million Series B in April this year. The company has worked with Capitec since 2023 to integrate Capitec Pay into its platform. This VRP launch represents a maturation of that partnership.

So What: The use cases are pretty compelling. Food delivery services can charge variable amounts based on order size. Logistics companies can bill per shipment. Mobile operators can implement true pay-as-you-go plans. E-commerce subscriptions can tier pricing dynamically. All without credit card fees. For Capitec, this deepens account stickiness -customers who set up VRPs are unlikely to switch banks. For merchants using Stitch, it's a cheaper, more inclusive payment rail.

Be smart: VRPs likely represent the next evolution in account-to-account payments. The UK pioneered VRPs under open banking regulations; Capitec and Stitch are adapting the concept for SA's market structure. The timing is strategic - Capitec has been aggressively disrupting business banking, opening 69,000 accounts in six months and slashing card machine fees to undercut competitors. VRPs give those merchants another reason to route payments through Capitec. You already know what I’m going to say - expect other banks to scramble for VRP partnerships. Sure, credit cards are far from dead, but they just lost another defensible moat especially for early adopters.

THE SCOOP

  • Zazu tackles SME 'missing middle': South African startup raises $1M to build "Mercury-style" banking for Africa's underserved small businesses with 50+ beta users and 1,000+ waitlist.

  • AXIAN pivots to full banking: Pan-African group rebrands fintech arm to AXIAN Digibank & Fintech, moving beyond mobile money to offer credit, savings, and business tools.

  • PalmPay crowned fastest-growing: Nigerian neobank ranked #2 overall in FT's Africa list with 583.6% CAGR from 2020-2023, now serving 35M+ users processing 15M daily transactions.

  • African banks outperform globally: Banking brands grew 22% in brand value led by Capitec (100% increase), Nedbank (37%) and Kenya's Equity Bank (23%). Brand managers rejoice!

STARTUP SPOTLIGHT

Zazu: Building "Mercury for Africa" to Serve the Missing Middle

Zazu, a South African fintech startup, has raised $1 million in pre-seed funding to tackle what founders call Africa's "missing middle" - a nice term for the SMEs trapped between microfinance and traditional banking.

The Problem: At the bottom of Africa's financing pyramid, micro-entrepreneurs access microfinance. At the top, established corporates get white-glove banking treatment. But SMEs raking in R100,000 to R50 million annually fall into a chasm where banks don't understand their business models and fintech apps don't talk to each other.

The Solution: Zazu offers a rebundled financial operating system combining core banking (accounts, cards, transfers) with API-driven integrations to accounting platforms, payroll systems, tax management tools, and cap-table software. Think of it as a financial command centre where SMEs can see cash flow, revenue trends, and runway projections in one dashboard rather than juggling five different apps.

WHAT TO WATCH

ON THIS DAY IN FINTECH HISTORY

7 December 1995: The First Interstate Bancorp and Wells Fargo merger was approved, creating one of the largest banks in the western United States. The $11.3 billion deal sparked a wave of banking consolidation in the late 1990s. Fast-forward 30 years, and the consolidation playbook hasn't changed much - except now it's Vodacom dropping R36 billion on Safaricom, Stripe gobbling up Metronome, and Nedbank swallowing iKhokha for R1.65 billion. Some things never change; they just get better logos, fancier APIs, and eye-watering price tags. See ya next week!