M-Pesa, the African mobile money phenomenon, will see its transaction fees for low-value payments being significantly reduced as its owner, Vodafone subsidiary Safaricom, prepares to fight competition from rival services in Kenya.
Vodafone’s M-Pesa mobile money service will cut fees in Kenya
Kenya’s Equity Bank is preparing to launch a service boasting lower transaction fees than M-Pesa, charging a 1% fee capped at KES 0.25. M-Pesa doesn’t cap charges but will cut its fees in a bid to keep the loyalty of its 19.3 million users. The new tariffs will apply to transactions from KES 10 to KES 1,500, which Safaricom said make up 65% of all M-Pesa transactions.
“By lowering the cost of these transactions we will provide an increased number of Kenyans with affordable access to basic financial services,” Safaricom’s CEO Bob Collymore said in a statement. Financial services make up 20% of the telco’s revenue and the significant fee reduction “is an expression of confidence in our longer-term strategy to drive the growth of a cash-lite economy.”
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