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Good news for Kenyan operator Safaricom, though possibly less so for its customers, is that coronavirus-related price cuts affecting its mobile payments business could end soon.
In fact, according to a statement from its CEO Peter Ndegwa, reported by Reuters, the operator expects M-Pesa’s price restrictions to be lifted by the end of the year.
As regular readers will know, Safaricom complied earlier this year with requests from the central bank to remove all fees on small peer-to-peer transfers in March. The bank also ordered commercial banks to eliminate charges on customers’ cash transfers to mobile wallets until the end of the year.
While the goals were to encourage cashless payments and help limit unnecessary contact during the Covid-19 pandemic, profits for both Safaricom and the banks have taken a huge hit since the charges were dropped.
As we reported last month, Safaricom and the country’s banks expected the Central Bank of Kenya to involve them in any decision on extending the free trading rules beyond the end of the year.
Safaricom CEO Ndegwa now seems confident that this will not be necessary, although talks with the central bank appear to be ongoing. On the bright side, for consumers at least, the company may still cut prices for some M-Pesa services after volumes rose significantly during the pandemic.
Reuters also reports that Safaricom is offering financing to 60,000 customers to buy 4G phones in an effort to boost data usage and offset the recent drop in M-Pesa’s revenue. More than half of Safaricom’s customers use 2G.
However, M-Pesa will undoubtedly continue to play a central role in the company’s plans. As a popular and highly successful system used to send money, save, borrow, and make payments for goods and services, it appears to have close to 27 million active users out of a 2019 Kenyan population estimated at 47.6 million.
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