Safaricom Wanted CBK To Limit Free M-PESA Transfers To 5 Per Day After Massive Losses
Free M-PESA cash transfers for transactions less than Ksh 1000 is very helpful. It’s a measure put forward by the Central Bank of Kenya (CBK) to help Kenyans navigate the pandemic.
It seems Safaricom was not so happy wholly with the idea. In an article published by Business Daily, the telco petitioned the Central Bank of Kenya (CBK) to cap the number of multiple transactions between two numbers.
The telco has reportedly recorded massive losses because of the free M-Pesa cash transfers below Ksh 1000. Safaricom is reportedly losing Sh1.7 billion on a monthly basis.
According to the telco, M-PESA customers have been splitting large cash transfers(up to Ksh 60,000) to small chunks of Ksh 1000 to dodge the transfer charges. The behavior of splitting high-value money transfers is why the telco wanted the CBK to impose limits of free cash transfer between two numbers to five.
“We have pressurized the CBK to allow us to cap the number of split transactions at five. So far CBK has not obliged, but we are continuing to put pressure on them,” said Michael Joseph, Safaricom’s director, in a call transcript that was made to investors on April 29, 2020.
The telecom operator even asked the CBK to reduce the threshold for free cash transfer to Ksh 500 to help cut revenue losses.
Safaricom lost the bid, says the publication.
Free cash transfers for transaction values under Ksh 1000 started in mid-March and have recently been extended by six months to end on December 31, 2020.
The major loser seems to be Safaricom. The telco has earlier reported losing Sh1.8 billion monthly since the CBK move in mid-March. During the company’s release of the 2019/20 financial year results, the telco reported losing Ksh. 650 million in March – in just 15 days!.
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