https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js?client=ca-pub-5653101863891512
Home Business Safaricom Slashes M-PESA Transaction Fees by 67% As Competition Looms

Safaricom Slashes M-PESA Transaction Fees by 67% As Competition Looms

by Sam Wakoba
1 comment

safaricommpesaWhen M-PESA was introduced in 2007, there was no contender, no better service and it was all new to Kenyans. The service has garnered over 19.3 million customers, over 88,000 agent outlets countrywide,which is more than 80% of the country’s adult population.

Now, Equity Bank wants to join the mobile money race with even lower prices as well as Kenya Airways, others here and Vittel’s intention to take over Orange.

Today, Safaricom announced it’s slashing M-PESA transaction fees levied on its most popular person to person M-PESA transaction bands. The new tariffs, are set to take effect from Thursday 21st August, 2014, and will see transaction fees reduced by up to sixty seven (67%) percent in the low and medium tiered bands which include the transfer of amounts ranging between Kshs 10- to Ksh 1,500.

The operator has also cut the tariffs for sending higher amounts exceeding Kshs. 1,501 to be an average of zero point eight (0.8%) percent of the transaction value. Safaricom believes this move will provide an increased number of Kenyans with affordable access to basic financial services and will drive the compnay’s cash-lite strategy.

According to Central Bank of Kenya statistics for the period ending 2013, M-PESA has helped push the number of people in the formal financial fold to 83%, a figure that would drop to 25% without M-PESA. Lowering these fees will help increase the number steadily. Though other fees have been dropped, the transaction fees for Lipa Na M-PESA and indeed all other tariffs, will remain unchanged. Safaricom also promised to bring home its M-PESA infrustructure from Germany and open its API to the public to open up more opportunities for cashless transactions within the country.

In July Finserve, Equity Bank’s telcos subsidiary on launch of its MVNO plans, said it would launch a new SIM-card which will bring more “choice and freedom” to the mobile transfer services and mobile telephone clientele.

Talking to investors at the bank’s headquarters, James Mwangi, Equity Bank’s CEO said that the SIM-cards, which bear the prefix 0763xxx, were already being used by the internal staff and a countrywide roll out for every Equity Bank customer was to happen apart from the current opposition from the Consumers Federation of Kenya.

Equity Bank, being a bank would not need to hire banking services from another bank like Safaricom does from CBA for M-PESA and M-Shwari. Therefore, the shorter chain meant lower tarrifs as there are no brokers or any brokerage fees from bank to telecom operator. Equity Bank termed the move as estimated to “empower” over 25 million subscribers.

According to Equity Bank, the new SIM-cards will improve mobile banking security through data encryption. Easy and convenient access to SMS and USSD will also enable the bank to lower the cost of mobile banking by breaking the commercial barriers, which have so far been put by some mobile telecom operators. The barriers had initially limited the public from accessing mobile banking services due to prohibitive charges by some mobile telcos.

The some mobile telcos Equity Bank was referring to was definately Safaricom. Recently, telco regulator Communications Authority of Kenya (CAK) ordered Safaricom to open its M-Pesa platform following a petition Airtel Kenya filed earlier this year accusing Safaricom of unfair competition. It’s like price will be the giant’s only banner of victory as Equity also claims to have the numbers after its massive campaign to give bank accounts to everyone across the country.

You may also like

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js?client=ca-pub-5653101863891512
%d bloggers like this: