Safaricom has hinted at plans to cut M-PESA transaction costs to retain increased cash transfers on the mobile money platform.
The government’s directive to shelve transaction costs on all mobile money transfers up to Ksh 1000 has helped Safaricom’s populous mobile money platform increase the volume of transactions in a short period.
Safaricom saw the value of M-PESA transactions jump by 32.9 percent to Sh9.04 trillion, although they missed out on billions of cash in transaction charges.
In the six months to September, volumes of M-PESA transactions grew 14.9 percent to Sh5.12 billion.
Due to the free cash transfers, the company reportedly added 3.2 million one-month active customers on M-PESA.
CEO Peter Ndegwa reveals they are considering to cut transaction costs, but they will have to assess changes in volume before making a final decision.
However, the company’s long-term plan is to reduce the cost of sending money via M-PESA. It’s not clear yet when, and they haven’t yet decided for now.
“It is something we are looking at and we intend to reduce our transaction costs over time. How quickly we do that is something we want to judge but certainly, we haven’t made a decision yet at this stage,” Ndegwa said.
According to the company’s CEO, the cut in transaction costs is part of the bigger plans to retain the newly acquired M-PESA customers, and those who have increased cash sent via the platform.
Free M-PESA Transfers
Free M-PESA transactions cost the company an estimated Ksh 9 billion, which made a notable dent in their recently announced half-year results.
M-PESA only accounted for 30 percent of the company’s profit, down from 33 the year prior. Free transactions on the mobile money platform enacted from March 18th and later extended to December 31st by the government were meant to encourage cash-less payments and help Kenyans stay afloat during the pandemic.
This month, Safaricom CEO, during the announcement of its half-year results, said they are in talks with the CBK over free M-Pesa transactions.
“We are not ready at this stage to announce when the free cash transfers end as we are still in engagements with the CBK,” Ndegwa said at the time.
The CBK has not yet decided if it’ll extend the policy or not, yet the number of covid-19 cases in the country has immensely increased in recent weeks.