Safaricom has awarded Huawei a contract to upgrade its M-Pesa money transfer platform, according to Kenya’s Business Daily.

The upgrade aims to make it easier for M-Pesa customers to settle their postpaid electricity bills, as well as enable payments in real time, avoiding unnecessary disconnections.

The upgrade will also allow M-Pesa users to settle insurance premiums and bank payments in real time.

According to Business Daily, the M-Pesa upgrade will take 18 months to complete. The first phase is expected to be finished during Q4 2013.

The current M-Pesa platform handles between 200 to 300 transactions per second but that rate is set to increase tenfold after the upgrade.

The real-time payment facility will also be welcome. Apparently it takes 48 hours before payments made to Kenya Power are reflected in the utility’s systems. Payments made to the National Hospital Insurance Fund can take up to 76 hours before they are acknowledged.

“Safaricom will migrate to this new platform in about 18 months’ time and planning has already begun for the extremely complicated process,” former Safaricom chief executive and director of mobile money at Vodafone Group Services, Michael Joseph, told Business Daily. “The new platform is designed to be more efficient and therefore costs less to operate and maintain.”

As part of the upgrade, M-Pesa servers are to be relocated to Kenya from Germany, a move that is expected to improve the reliability of the mobile money transfer and cut overheads.

Joseph would not reveal if cost savings would be passed onto consumers, other than saying that such a decision would have to be made by both Safaricom and Vodafone, which owns a 40 per cent stake in the Kenyan operator.

News of the Huawei upgrade follows closely on the heels of a new report by the Central Bank of Kenya showing the monthly value of mobile-based transactions, across all of Kenya’s networks, to be in decline during Q1 2013.

January saw total mobile money transfer transactions reach KES143.7 billion ($1.7 billion), which fell to KES142.8 billion in February. The total value then fell down again, to KES136 billion, in March.

A contributory factor to the decline was no doubt the government’s introduction of a mobile money transfer tax in February.

More encouragingly, the bank’s report finds the number of mobile money subscribers is still on the rise in Kenya, going from 21.4 million in January to 22.3 million by the end of March.