The virtual card is offering Sh121.92 to the dollar for payments across Visa’s 61 million merchants. The M-Pesa Global Pay Visa Virtual card according to the company, facilitates users to securely pay foreign merchants like Amazon and Alibaba from their mobile phones without credit cards or accounts with processors such as PayPal.
Keeping an eye on a bigger share of the cross-border payments market, M-Pesa virtual Visa card is undercutting Kenya’s commercial banks with lower foreign exchange rates. The virtual card is offering Sh121.92 to the dollar for payments across Visa’s 61 million merchants. Safaricom is using lower pricing to gain better market share in a business segment that has been dominated by lenders. The charges for payments against the dollar by other players are, the KCB Group debit card Sh128.10, DTB Group Sh128, Cooperative Bank Sh127.95, NCBA Group Sh126.80, Equity Sh126, Standard Chartered Sh125.37 and Sh125 for Absa.
M-Pesa rate is regarded to be cheaper compared to those of Kenya’s top banks battling to capture some of Africa’s $40 billion-a-year subscriptions market. Moreover, the exchange rate has become a big issue in Kenya in recent years due to the forex short supply pulling down the value of the shilling to record lows making imports and foreign currency-based payments costlier.
The M-Pesa Global Pay Visa Virtual card according to the company, facilitates users to securely pay foreign merchants like Amazon and Alibaba from their mobile phones without credit cards or accounts with processors such as PayPal. They can use the virtual card for subscriptions for services like Netflix and Spotify. Safaricom also proposes to offer additional services on M-Pesa such as investments and insurance which are waiting for regulatory approval.
After launching the virtual card to more than 30 million M-Pesa users in Kenya the card has been rolled out in Tanzania, where testing is going on. The company plans to launch it in Mozambique, Congo, Lesotho, and Ghana by April 2023.
The M-Pesa has become the top revenue earner for Safaricom’s overtaking voice. Mobile money service revenue climbed to Sh107.7 billion supported by lower transaction charges and improved business activity. Merchant payments through M-Pesa grew phenomenally, during Covid-19 as consumers preferred cashless transactions to avoid contracting the infectious virus. Currently, the financial service accounts for 38.3 percent of total revenue of Sh281 billion, ahead of voice’s contribution at 31.2 percent in the review period.
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