Safaricom has cut its fees by 67 per cent for “low- to medium-sized” transactions on its popular M-Pesa money transfer service. The move comes ahead of a possible rival service launch by Equity Bank.
The Kenyan mobile operator, in a statement, claimed it made the cut with the best interests of its customers at heart.
“We have spent a considerable amount of time analysing M-Pesa usage trends and we have established that over 65 per cent of all M-Pesa person to person transactions are within the KES10 to KES1500 band [between $0.11 and $17.00],” said chief executive Bob Collymore. “It is our belief that by lowering the cost of these transactions we will provide an increased number of Kenyans with affordable access to basic financial services.”
Fees for sending amounts exceeding KES1501, added Safaricom, are to be averaged out at 0.8 per cent of the transaction value.
The cuts come at a time when Equity Bank, which won a MVNO licence in April, is gearing up to launch a money transfer service with a 1 per cent fee capped at KES25.
Safaricom has already clashed with Equity Bank, claiming that its planned use of paper-thin SIM ‘stickers’, which can be attached to existing SIM cards, poses a security threat.
Use of that technology would mean Equity Bank mobile users wouldn’t have to spend extra on dual-SIM handsets.
The Communications Authority of Kenya (CA) is scheduled to hear a complaint against Equity Bank, made by Safaricom, on 22 August. Safaricom’s lower transaction fees come into effect the day before.
The M-Pesa operator seems to be preparing for the worst.