Telco firm Safaricom is considering reducing MPESA transaction fees in efforts to retain the higher business volumes that followed the imposition of free MPESA for deals of less that Sh1000.
Safaricom CEO, Peter Ndegwa, signalled that the firm may offer price cuts to retain customers who have joined the service and those who revved up transactions due to free transfers that were introduced in March.
“We are considering but we would want to see how consumers respond to volumes before we make a significant judgment on that. 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,” Mr Ndegwa said in reference to the price cut.
On 16th March, the Central Bank of Kenya (CBK) announced the removal of charges on MPESA transactions of up to Sh1,000 in order to make more Kenyans transact online and avoid touching potentially Covid-19-contaminated cash. The fee waiver was extended to December 31.
Safaricom notes that the relief measures have helped increase the value of MPESA transactions by 32.9 percent to Sh9.04 trillion and it added 3.2 million one-month active customers.
Safaricom had said that it was cautious about how consumers will respond when the free service is withdrawn.Business Daily
These are the growth numbers that Safaricom is seeking to defend with a price cut.
However, though more clients have come into the fold, Safaricom had also complained about the lost revenue.
Safaricom reckons that the free M-Pesa transfer cost it Sh9 billion in the six months to September, which saw the firm report a six per cent drop in net profit to Sh33.07 billion — the first fall in nine years.
Banks and Safaricom are fretful that the CBK could extend the free service amid the spike in Covid-19 cases and fatalities.
The firms are pushing for the CBK to involve them should the regulator decide to extend the tenure of free transactions beyond end of December.
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