- The move aims at retaining the customers and higher business volumes that followed the imposition of free M-Pesa for deals of up to Sh1,000 in March.
- This is the second time that Safaricom is hinting at fee cuts on a service that has 26.79 million active users.
Safaricom #ticker: SCOM is mulling a cut in service charges. It is reportedly considering cutting M-Pesa transaction fees. The indication about the cut came from the telco’s CEO, Peter Ndegwa. This is the second time that Safaricom is hinting at fee cuts on a service that has 26.79 million active users.
The move aims at retaining the customers and higher business volumes that followed the imposition of free M-Pesa for deals of up to Sh1,000 in March. The Central Bank of Kenya (CBK) announced the removal of charges on M-Pesa transactions of up to Sh1,000 from March 16 to encourage cashless payments to curb the spread of the coronavirus. The offer is extended to December 31, when bank-to-mobile phone transactions would be free. The relief measures introduced increased the value of M-Pesa transactions by 32.9 percent to Sh9.04 trillion and added 3.2 million active customers. With the rising cases of COVI-19, CBK may extend the free service.
Referring to the price cut, Mr Ndegwa said that the company would observe the response of the consumers to volumes before the decision is taken. He, however, added that the company plans to reduce transaction costs over time. In the six months ended September, the volumes of M-Pesa transactions grew 14.9 per cent to Sh5.12 billion.
Safaricom reported that the free M-Pesa transfer cost it Sh9 billion in the six months to September, which is a six per cent drop in net profit to Sh33.07 billion — the first fall in nine years. Last year it had stated that the Sh2.15 billion acquisition of M-Pesa through a joint venture with Vodacom would give it full control of the brand, save it billions of shillings in royalties and give it room to cut fees.
