Safaricom halves M-Pesa fees as it targets smaller businesses
SAFARICOM will be cutting Lipa Na M-Pesa merchant fees by half as it targeted small and mediumsized enterprises for growth in its bid to “extend the gains of mobile money 10 years after its launch in Kenya”.
The mobile telecommunications company that pioneered mobile money services said yesterday the new fee, a maximum of 0.5 percent of the transaction amount down from 1 percent, would be effective from next week.
In addition, Safaricom said, Lipa na M-Pesa merchants would be charged a flat fee of 200 Kenyan shillings (R24.60) for any payments above Ksh40 000.
“We trust that this development will boost the attractiveness of the Lipa Na M-Pesa platform to more small and medium enterprises while making the service more affordable compared to other alternatives in the market,” said Bob Collymore, Safaricom’s chief executive.
In addition, Safaricom said the M-Pesa Kadogo tariff, which allows customers to make small transactions for free, would be expanded for Lipa Na M-Pesa Buy Goods to enable merchants to receive all transactions of Ksh200 and below at no cost.
Also merchants would benefit from instant processing of many more transactions made through Lipa Na M-Pesa with the service now available at 23 participating banks. This cuts the time it takes to move money from a Lipa Na M-Pesa till to a bank account from as much as 28 hours down to seconds.
The reduction of the Lipa Na M-Pesa tariffs and inclusion of more financial institutions under Real Time Settlements targets small and micro businesses, such as kiosks, bodabodas (motorcycle taxis), matatus (minibus taxis), newspaper vendors, hawkers and small eateries in a country where up to 80 percent of people are employed in the informal sector.
The Safaricom changes in Lipa Na M-Pesa will be effective from next week.