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Finally, this conversation is getting into the right boardrooms. MPESA transaction charges are quite a hot topic, especially on social media. Most people, myself included, are of the opinion that the costs for sending or withdrawing money through MPESA are a bit too high. It would appear that the Treasury is now working on a proposal that will make Safaricom reduce MPESA transaction charges.
Safaricom‘s MPESA is a dominant mobile money platform in the country. It is Safaricom’s biggest earner, currently boasting over 30 million monthly active users. Additionally, MPESA accounts for about 99.9 percent of the value of mobile money transactions in the economy. However, the transaction charges on the platform are costly even when compared to other mobile money offerings.
As an example, Airtel Money charges KES 22 to send and withdraw KES 500, while MPESA charges KES 40 for the same. To transfer KES 5,000 on MPESA will cost KES 159, while Airtel takes less than half of that at KES 75.
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“This is in the area of unconscionable/excessive rates and Safaricom being a critical trading partner for SMEs and consumers. We will soon be presenting some proposed amendments to deal with this scenario.” Treasury Cabinet Secretary Ukur Yatani told the Senate.
Merchant payments through Till and PayBill numbers, Pochi La Biashara and other financial services on MPESA including loans also come with such hefty charges. MPESA is getting integrated in almost every sector of the economy, and competitors are crying abuse of dominance.
The treasury noted in previous reports that a widespread disruption would occur in the economy in case the MPESA platform collapsed. Therefore, regulations are needed to cub the that possibility before it becomes reality.
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