01 November 2014

As Equity Bank preps rival, Safaricom slashes M-Pesa fees

20 August 2014  |  4322 views  |  1 Mobile phone turning to cash

Kenyan telco Safaricom is slashing its transaction fees for low value person-to-person payments made using its wildly popular M-Pesa mobile money service.

From this week, M-Pesa's 19.3 million users will see the cost of making a payment of between 10 shillings and 1500 shillings fall by 67%. Around two thirds of all transactions are in this range.

Bob Collymore, CEO, Safaricom, says: "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."

The price drop comes as M-Pesa faces up to a challenge to its long-held dominance of the Kenyan mobile money market.

Earlier this year, Equity Bank was granted a mobile virtual network operator license and is now preparing to launch paper-thin SIMs that can be stuck to existing SIMs to enable payments.

According to ITWeb Africa, this week the Communications Authority of Kenya will hear a complaint by Safaricom against Equity alleging the plans put customers at risk of fraud.

Comments: (1)

Ritesh Agarwal - On My Own - Bangalore | 22 August, 2014, 10:00

Question to Equity Bank CEO: Why Equity Bank is not encashing on their strengths and trying to compete with Telco's strengths. Bank have and would continue to have significant advantage in mobile based payments...be it meaningless wallet or else. 

Wallets would survive only in that country where cost of banking transaction is high and user needs cheaper mechanism. All concepts like unbanked, financial inclusiveness are gimmick. It is laughable that in US/UK, we expect a person to own a mobile but not have a bank account. Folks... which world are we living in and whom are we fooling. Africa is a success story for wallets because banks are ripping African people with all sort of obnoxiously high charges/fee. They created their own enemy and now amusingly Equity Bank has applied for VNO license. I am surprised...who advises such moves.

They have an existing infra-structure, wherein they can beat any Telco on their own turf....and bingo... with zero cost of transaction. Are Kenyan banks aware of it...?

Unfortunately, rest of the world is disillusioned by mPesa and similar examples and they are burning investors' money...offering a wrong solution to an unknown problem.

Need is not a wallet...but need is a payment system. I hope wise people can make out the huge difference. mPesa is not behaving as a wallet...but it has become mode of payment...for all purposes.

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