Safaricom Slashes M-PESA Transaction Fees by 67% As Competition Looms
When 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 company’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.