Govt to slash M-Pesa transaction rates

Safaricom awards businesses hourly as M-Pesa marks 15 yrs since launch

Safaricom’s gigantic revenue record is likely to be tampered with, considering the government’s proposal to slash M-Pesa transaction rates.

National Cabinet Treasury Ukur Yatani is keen on making mobile money transactions affordable for Kenyans, who have been reeling from harsh economic times exacerbated by the coronavirus pandemic since its advent on March 13, 2020.

According to Yatani, the move is facilitated by the fact that many Kenyans have been using the platform for business and their daily lives hence it should be cheaper.

This even as consumers of the product have been lamenting on high transaction costs.

“Another source of concern with mobile money stems from the perception both by consumers and small businesses that the rents from digital technology are unfairly accruing to Safaricom Plc,” said Mr Yatani while speaking before the Senate.

The M-PESA platform has approximately over 30 million active users in Kenya alone compared to their opponents who are mainly Telcom Kenya and Airtel Kenya.

Transaction charges differ between Safaricom and it’s opponents as the transaction cost for KSH 5,000 on M-Pesa is KSH.159 while on Airtel the cost is KSH.75,Whereas KSH.25,000 on M-PESA costs KSH.405 while on Airtel the cost is KSH.160.

Recent data from the Central Bank of Kenya (CBK) reveals that M-Pesa has grown by 99.9 percent equivalent to KSH.2.206 trillion out of a total of KSH.2.208 trillion worth of transactions in 2021.

Kenya remains M-Pesa’s most active market accounting for more than 30 million of the service’s 51 million customers across Kenya, Tanzania, the Democratic Republic of Congo, Mozambique, Lesotho, Ghana and Egypt.

Safaricom’s M-Pesa revenue surged 48.5 percent to record a whooping Ksh.13 trillion up from Ksh.9 trillion.

The growth in M-PESA customer usage has been driven by the launch of various innovations over the years including financial services such as M-Shwari, KCB M-PESA and Fuliza.

The telco established both local and global partnerships that enable customers to send and receive money, and to make payments across the world including with PayPal, AliExpress and Western Union.

The last two years have seen M-PESA record explosive growth in business usage with the number of businesses accepting payments on its Lipa Na M-Pesa service more than doubling from 173,000 in April 2020 to more than 387,000 today.

This as small operators continue to argue that Safaricom enjoys a dominant position as it acounts for 90 percent of revenues, allegations that Safaricom has denied.

Airtel money has however recorded a drop of 0.2 percent and Telcom T-cash by 0.1 percent.

Earlier on reports from the Treasury ministry revealed that the country would face an economic blow if M-Pesa services were suspended stating that  it is a fiscal risk.

In the year ended 2021 M-Pesa recorded revenue of Ksh.82.64 billion ahead of voice at  Ksh.82.55 thus yielding a total of KSH 264 billion and a net profit of Ksh.68.68 billion.

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