Mobile operator Safaricom is said to be toying with the idea of lowering transaction charges across all bands on its M-Pesa mobile cash transfer platform.
The plot is to retain the more than 27 Million subscribers on this platform and to cushion the operators from further losses occasioned by the fees waiver for amounts of less than KSh 1,000.
While announcing its 2020/21 half-year earnings, the firm’s Chief Executive Peter Ndegwa said Safaricom reported revenue losses on its M-PESA business. He also admitted that adverse effects of the coronavirus pandemic had not left the business unscathed.
At the height of the COVID-19 pandemic, Safaricom has been one of the corporates that have supported the state and customers to survive the scourge.
This is through the provision of data to frontline health workers, free mobile cash transfers of amounts below KSh 1,000 and deploying its call centre infrastructure for use by medical staff in the campaign against covid-19 infections.
Safaricom’s plan to lower transaction fees on its M-Pesa platform is designed, according to Ndegwa, to appeal to a loyal user base, including those who started using the mobile money product actively following the zero-rating of under 1000 transfers.
While Safaricom and other mobile operators were directed to waiver transaction fees for any amounts below KSh 1,000 in March this year, this provision has persisted as the pandemic continues to ravage the economy.
With a possibility that CBK may hold this waiver to next year, Safaricom appears to be moving fast to stop further haemorrhage on its M-Pesa earnings.
Data has shown that customers have moved to the free transaction zone, moving smaller amounts, in order to avoid the high fees charged on sums above KSh 1,000.
M-PESA is Safaricom’s main cash engine, ahead of voice and data. Safaricom’s H1, 2020/21 figures show that the M-PESA platform registered a drop in revenues by 14.5%.
This cash transfer platform has more than 27 Million customers that Safaricom is determined to retain.
Ndegwa said the firm is considering but still watching how consumers respond to volumes before it makes a significant judgment on that.
He said the firm intends to reduce its transaction costs over time. But how quickly this decision is made is still unclear.