Safaricom reduces M-Pesa transaction charges by nearly half
Published on: December 22, 2020 05:01 (EAT)
Leading telco operator Safaricom has trimmed M-Pesa transfer costs by up to 45 per cent ahead of the end of the waiver on free cash transfers below Ksh.1000 on January 1. The move is aligned to directives by the Central Bank of Kenya (CBK) which required mobile money operators to submit new pricing structures that are reflective of new principles including transparency, fairness and affordability. New costs of sending amounts between Ksh.501 and Ksh.1000 among M-Pesa customers is set to come down slightly from Ksh.15 to Ksh 12 while the cost of sending sums between Ksh.101 and Ksh.500 is set to shrink to Ksh.6 from a previous Ksh.11. The lower charges are set to benefit lower value transaction as the telco largely retains fees of sending higher sums over its M-Pesa platform. Nevertheless, Safaricom says the lower charges will be of benefit to the majority of its customers as the low value transactions represent 90 per cent of its transactions. “These tariff reductions will affect more than 90 per cent of all customer transactions when sending money. The price cuts are permanent, effective from January 1, 2021 and will enable more than 26.8 million customers to continue enjoying lower costs whenever they send money,” said Safaricom CEO Peter Ndegwa. The telco-operator has however left the cost of withdrawal from M-Pesa agents as unchanged with the price of withdrawing Ksh.1000 for instance remaining at Ksh.28. On Thursday last week, the Central Bank of Kenya (CBK) announced the end of free mobile money transfers of amounts totalling to Ksh.1000 which had remained free since mid-March as a counter measure to combat the effects to the pandemic. The free-cash transfers however dented earnings for mobile-money operators with Safaricom for instance losing Ksh.6 billion in revenues from the waiver in six months of operations to September this year. The end of the waiver meant not just the return of costs to customers but also dimmed the transition towards a cashless economy which had taken shape during the pandemic. According to data from the CBK, mobile money transactions of up to Ksh.1000 had for instance grown by 114 per cent while 2.8 million additional customers begun using mobile-money services.