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Business

Safaricom drops some Mpesa charges as it posts $239.3 million profit

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Safaricom limited chief executive officer Bob Collymore speaks during the release of the Telco’s half year financial results at Safaricom House in Nairobi on November 4, 2016. PHOTO | SALATON NJAU. 

By JAMES ANYANZWA

Posted  Friday, November 4   2016 at  14:00

Kenya’s mobile phone operator Safaricom has scrapped charges on money transfers through its M-pesa platform for transactions valued below Ksh 100($1).

The decision seen as an attempt to win customer loyalty in the face of increasing competition in the mobile money business will see the telco forego Ksh500 million ($5 million) worth of revenues per year

The announcement was made at the company's investor briefing in Nairobi earlier Friday.

The telco, whose profit for the six months to September 30 jumped 32.36 per cent to Ksh 23.93 billion ($239.3 million) has also waived fees on payments through its cashless Lipa na M-pesa channel for transactions below Ksh100 ($1).

The company said its latest decision is meant to empower small traders and micro agents who form a bulk of its network.

“Delivering our financial inclusion agenda remains at the core of our strategy to transform lives. We have listened to our customers and we have reviewed charges for person-to-person and Lipa Na M-Pesa transactions under Ksh100 ($1),” said Bob Collymore, the company’s chief Executive said.

“Under the “M-PESA Kadogo” it will be free to send values of $1 and below. We shall continue to grow the adoption of savings and uptake of loans through the M-Pesa and grow cashless business payments and transactions,” added Collymore.

Commissions

However, charges for withdrawals of similar amounts through the agents remain unchanged, though a customer cannot withdraw less than Ksh50 ($0.5) at an M-pesa agent outlet.

M-pesa charges are effected from a minimum of Ksh 10($0.1) to Ksh 70,000($700) transaction.

Safaricom introduced its Lipa na M-pesa platform in June 2013, charging traders 1.5 per cent for receiving money through the channel before reducing the commission to one per cent.

However customers pay different fees for using the Lipa na M-pesa service. For instance those buying fuel pay a 0.5 per cent commission on the value of every payment made.

Last year (2015) Equity Bank entered the mobile money transfer business through its mobile virtual network operator (MVNO) Equitel that provides for free cash transfer between customers on the same network.

In October, the bank also launched EazzyPay, a service that allows customers to pay for goods and services from their Equitel lines.

Mpesa revenues

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