COVID-19: M-Pesa revenue to drop by 7% due to adjusted transaction rates
By Daisy Okanga | Safaricom projects a Ksh5.5 billion drop in its revenue from M-Pesa in the three months from mid-march after it adjusted transaction rates due to the coronavirus pandemic.
The foregone revenue, equating to 7.3 percent of the mobile money platform’s annual earnings, will be caused by the waiver of all transaction charges on units below Ksh1000, including transactions from bank accounts to M-pesa to facilitate cashless payments to help to contain the coronavirus pandemic.
Despite the ballooned projection, Safaricom’s Chief Executive Officer Peter Ndegwa says he is not worried about the projections.
He said that the M-Pesa business could benefit from increased usage as customers shun bank notes during the crisis, but cautioned that it was too early to say for certain.
M-Pesa, which was launched by Safaricom in 2007, is one of the most popular modes of payments in Kenya. The platform is used to send money, save, borrow and make payments for goods and services.
Ndegwa, who was Diageo’s managing director for continental Europe before taking his new role, said the coronavirus crisis will present new opportunities in the data business, which Safaricom needs to pick up the slack from declining volumes in traditional mobile telephony, according to the Reuters report.
“People are discovering they can work from home. Education and learning will change. Small businesses are going to learn they can digitize their operations and operate more smartly,” said Ndegwa.
So far, Kenya, the host parent for Safaricom has 270 confirmed cases of coronavirus, with over 50 recoveries registered.