Business

Safaricom slashes M-Pesa to bank & merchant transaction fees in renewed fight against Pesalink

Safaricom said it will next week implement a 50% tariff reduction for all Lipa Na M-PESA Buy Goods merchant fees, a move that will see the firm charge merchants a maximum of 0.5% of the transaction amount, down from the previous maximum of 1%.

The telco added that Lipa na M-PESA merchants will charged a flat fee of Sh200, for any payments above Sh40,000.

However, the big news is that merchants will also enjoy the convenience of instant processing of payments made through Lipa Na M-PESA to their bank accounts, with the service now available at 23 participating banks beating non-functional PesaLink’s 12 clueless banks.

According to Bob Collymore, CEO, Safaricom, “We trust that this development will boost the attractiveness of the Lipa Na M-PESA platform to more small and medium enterprises while making the service more affordable compared to other alternatives in the market.”

Safaricom also said it has revamped the system to cut down the time that it takes to move money from a Lipa Na M-PESA till to a bank account from as much as 28 hours down to seconds, another blow to PesaLink which is struggling to reduce the transaction time to half a minute.

Safaricom’s Real Time Settlements are targeting small and micro businesses, such as kiosks, bodabodas, matatus, newspaper vendors, hawkers, hotels, restaurants and small eateries amongst others who have no time to visit a bank, neither do they have time to wait.

However, to reap on the growing new sports betting craze, Lipa Na M-PESA PayBill and Gaming merchant tariffs, and Lipa Na M-PESA petrol station tariffs will not be affected by these changes.

Compared to Kenya Bankers Association (KBA) backed PesaLink, Safaricom’S m-Pesa is steps ahead.

PesaLink is not yet live even after launching with fanfare after a long period working in a pilot phase and bank staff have no clue how it works. KBA also needs to spend millions marketing it to users who are glued to M-Pesa as their daily mobile wallet compared to PesaLink which is more of an internal bank to bank money transfer service.

PesaLink’s only advantage is the ability to transfer as little as 10 shillings up to 999,999 shillings at an extremely low cost of 0 to 152 shillings, unlike M-Pesa which is capped below Ksh 200,000 but there is alleged lobbying to have the cap raised to a higher amount. This might not be a hard sale as the Kenyan government through the treasury owns 35 percent of Safaricom.

Customers in the 12 banks set to begin implementation of PesaLink are already using M-Pesa and banks have no guarantee their clients will shift to the new and untested PesaLink.

The Kenya Bankers Association and various banks have been working on the inter-bank mobile money platform for a long while with a sole aim of cutting out Safaricom’s M-PESA from the money chain. However, the banks might soon realize that overthrowing M-Pesa might not take much more than just launching their own inter-bank transfer service.

See below the Banks and Financial Institutions Offering Instant Lipa Na M-PESA to Account Transfers

# Real Time Settlement Provider Real Time Settlement Support
1 Equity Bank USSD + Web
2 Kenya Commercial Bank USSD + Web
3 Co-operative Bank USSD + Web
4 Diamond Trust Bank USSD + Web
5 NIC Bank USSD + Web
6 Standard Chartered Bank USSD + Web
7 Family Bank USSD + Web
8 Stanbic Bank USSD + Web
9 Consolidated Bank USSD only
10 National Bank of Kenya USSD + Web
11 Gulf African Bank USSD + Web
12 Eco Bank USSD + Web
13 First Community Bank USSD only
14 Commercial Bank of Africa USSD + Web
15 Bank of Africa USSD + Web
16 Chase Bank USSD + Web
17 Credit Bank USSD + Web
18 UBA Bank USSD only
19 Jamii Bora Bank USSD only
20 Spire Bank USSD + Web
21 Paramount Universal Bank USSD + Web
22 Prime Bank USSD + Web
23 Sidian Bank USSD + Web
24 Safaricom SACCO USSD only
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