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Safaricom's MPESA tariffs reduced

Safaricom cuts Mpesa fee to tame Equity mobile money onslaught

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Safaricom has strategically reduced its M-pesa transaction charges for it’s high and low value amounts to fend off tough competition from impending entry of Equity into the mobile money business.
The new tariffs set to take effect from tomorrow, will see transaction fees reduced by up to 67 percent in the low and medium bands that include transfer amounts from Sh 10 to Sh 1,500.
Similarly it has capped a 0.8 percent charge for transfer values exceeding Sh 1,501-meaning each amount will attract the percentage charge for cash transfers.
Transfers to a maximum of Sh 1,500 will thus attract a new charge of Sh 11.2 from current Sh 33 between registered users.
Those transacting Sh 2,500 will be charged Sh 22 while those engaged in transfers of Sh 35,000 will attract Sh 280 a slight rise of Sh 5 compared to current rates.
Safaricom said it has spent a considerable amount of time analyzing M-PESA usage trends and having established over 65 percent of all M-PESA person to person transactions are within the Sh 10 – Sh 1,500 band.
“It is our belief that by lowering the cost of these transactions we will provide an increased number of Kenyans with affordable access to basic financial services,” said Safaricom’s Chief Executive Officer, Bob Collymore.
Mobile money subscription in the country grew by 10 percent over the last 12 months to 26.2 million with number of agents growing by 19 percent to 103,660  by March,according to CA third quarter sector statistics.
Safariom has managed to serve 80 percent of the subscriptions through a locked system before country’s communication regulator pushed it to open up networks to allow growth of e-banking.
He added, “Our financial services portfolio now contributes close to 20 percent of our overall revenues and pushing through a tariff reduction of this magnitude is an expression of confidence in our longer term strategy to drive the growth of a cash-lite economy that delivers financial inclusion to millions of Kenyans through the convenience and affordability of our financial products.”
Lipan a M-pesa Transaction charges and other tariffs however the company said will remain unchanged.
The reaction by giant mobile operator controlling over 70 percent of local market share is a clear indication it is facing stiffer competition at home even as its mobile money platform is gaining popularity in Europe.
Safaricom had earlier announced its intentions of hosting its M-pesa backbone infrastructure locally by transferring it from Germany, as it feels heat from new entrants like Equity who have promised consumers lower charges once they come on board.
Equity has already begun testing both its new voice and mobile money among its staff using the highly contested paper-thin sim cards-overlaid on existing sim cards.
Communications Authority of Kenya (CA) has since summoned Safaricom and Equity to a meeting to determine whether Equity will be give a go ahead to use the embedded sim card.
Safaricom had protested equity’s move claiming it posed transactions to fraud and security risks for users.
Safaricom cuts Mpesa fee to tame Equity mobile money onslaught Reviewed by on . Safaricom has strategically reduced its M-pesa transaction charges for it’s high and low value amounts to fend off tough competition from impending entry of Equ Safaricom has strategically reduced its M-pesa transaction charges for it’s high and low value amounts to fend off tough competition from impending entry of Equ Rating: 0

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