Kenya’s telecommunications giant Safaricom is calling on the Central Bank of Kenya to terminate the order that required them to allow free M-Pesa transactions for 1,000 shillings and below saying it is eating into their profits.
The Central Bank of Kenya had directed the telcos in Kenya to allow Kenyans transacting 1,000 shillings and below to do so without any transaction fee in an effort to cushion Kenyans against the economic effects of the Covid-19 pandemic.
According to Safaricom’s CEO Mr. Peter Ndegwa, while speaking to Reuters, there is no need for CBK to extend the free transaction beyond the month of December saying the free waiver has been long enough and Kenyans have reaped the benefits.
M-Pesa is instrumental to Safaricom’s revenues given that it takes the lion’s share of the cashless transactions in Kenya. According to Safaricom’s head of M-Pesa, for every 10 cashless transactions in Kenya, M-Pesa accounts for 8 of them.
Currently, M-Pesa has more than 26.8 customers with at least 220,000 businesses having onboarded the Lipa Na M-Pesa feature. At the same time, M-Pesa is said to be supporting at least 5,000,000 micro SMEs in Kenya. The revenue has always boosted Safaricom’sprofits.
M-Pesa is currently doing 30,000,000 transactions daily according to the head of M-Pesa at Safaricom Mr. Sitoyo Lopokoyit speaking during a Stakeholders Forum organized by TechnoServe.
The active M-Pesa customers transact about 1.5 trillion shillings a month and Safaricom is counting on them to grow the savings, unit trust, and insurance products, set to be rolled out as soon as approvals are secured.
At the same time, the Central Bank of Kenya issued a directive to all commercial banks not to charge transaction fees for customers moving cash from their bank accounts to any mobile wallet, a move banks have said has negatively impacted their revenue.
Will the CBK listen to the financial providers and change the directive?