Telco Safaricom is reportedly considering reducing -PESA transaction charges in a plan that will see the operator retain high business volumes.
This development, first highlighted by publisher Business Daily, was revealed by Safaricom CEO Peter Ndegwa, who tipped that the company may consider providing fee cuts to appeal to its loyal user base, including those who started using the mobile money product actively following the zero-rating of under 1000 transfers.
The CBK directive started in March to June, but then got extended to December following the pangs of the pandemic.
The hint to reduce the prices is also considering the possibility of extending the relief to 2021 because the COVID-19 case does not appear to go away soon.
During the announcement of its HY results from the 2020/2021 FY, Safaricom reported revenue losses in M-PESA. CEO Ndegwa admitted that the severity of the pandemic has not spared businesses.
This has been a tough period for businesses and our customers and we committed ourselves to walk through this journey together. During this period, we took several initiatives to support our customers and the government to pull through this pandemic – CEO Peter Ndegwa
M-PESA, as usual, has always been Safaricom’s top earner besides voice and data.
While data recorded notable returns in terms of subscriptions and revenues, the M-PESA platform registered a drop in revenues by 14.5% YoY.
However, the long game here is to appeal to its near 27 million active M-PESA users who played a key role in pushing the platform’s transaction value and volumes.
Specifically, under that period, M-PESA transaction value grew by 32.9% YoY to KES 9.04 trillion. The volume of M-PESA transactions grew to KES 5.12 billion transactions.
Cutting transaction fees will possibly go a long waydefending the above numbers.
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 – Peter Ndegwa