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Mixed reactions as Safaricom cuts transfer fees on bank to Mpesa transactions

Post by : Robert Kamau

Safaricom CEO Peter Ndegwa during a past conference. the company has been sued for sim-card Swap fraud by one of their customers.

Safaricom will drastically cut charges on M-Pesa to bank transactions by a range of between 23 per cent and 100 per cent at the start of next year as the Central Bank of Kenya pushes forward with its goal of making financial services more affordable.

Banks and Safaricom have not been charging their customers for these transfers since the outbreak of the Covid-19 pandemic, with the waivers part of emergency measures aimed at increasing the uptake of cashless transactions besides offering relief to households.

The CBK has been allowing regulated entities to resume charges on their services but at lower rates than before, with the transfers between mobile wallets and banks being the latest to implement the price reforms.

While the charges have been cut substantially, their reinstatement will still boost the revenues of banks and Safaricom by billions of shillings.The telco has removed fees on bank-to-M-Pesa deals of up to Sh100.

Such transfers ranging from Sh20,001 to Sh150,000 will cost Sh12 going forward, representing a 46.4 per cent cut from the previous Sh22.4.Customers implementing M-Pesa to bank transfers will pay Sh4 for amounts between Sh101 and Sh500, marking an 82.6 per cent decline from the previous fee of Sh23.

Also Read: Safaricom sued for 400,000 over Sim-card swap Fraud

The charge on similar transactions of values ranging from Sh30,001 to Sh35,000 has been slashed 23 per cent to Sh87 compared to the previous Sh113.In the new changes, bank-to-M-Pesa charges have been reduced by an average of 61 per cent.M-Pesa to bank fees on the other hand have been cut by an average of 47 per cent.

The new changes

The changes will take effect starting January 1, 2023. Transactions below Sh100 remain zero-rated across all payment methods.

“The revised tariffs have been structured to ensure alignment with the Central Bank of Kenya pricing principles on customer centricity; transparency and disclosure; fairness and equity; choice and competition as well as affordability,” Safaricom said in a statement.

The telco is set to record billions of shillings from the reinstatement of the charges on bank transfers which constitute a significant part of the activity on its mobile money service.

Also Read: Safaricom Makes Over 100 billion in Profit, Mpesa Contributes Half

The company says bank transfers represent 20.6 per cent and four per cent of total M-Pesa transaction value and volumes respectively.The telco said that its total M-Pesa transaction value and volume both grew 32 per cent to Sh18.09 trillion and Sh9.6 billion respectively in the half year ended September.

The resumption of charges on bank transfers marks the latest partial recovery for M-Pesa.Last year, the telco resumed charging on transactions of below Sh1,000 between M-Pesa users (person-to-person payments).As part of the deal with CBK, the telco also reduced fees by up to 45 per cent for lower-value transfers of up to Sh7,500.

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