Safaricomi is making veiled overtures trying to reverse the gains made by the Central Bank of Kenya (CBK) on COVID-19 relief measures after making losses from waived transaction charges for 1000 and below.
CBK unilaterally announced extension on removal of charges on M-Pesa transactions of up to Sh1,000 initially announced on March 16 which was extended to December 31, making the mobile phone transactions for up to Sh1000 free.
Yesterday, although Safaricom Chief Executive Officer (CEO) Peter Ndegwa hinted consideration to lower transaction charges, The Informer is reliably informed the telcos firm is trying to prevail upon CBK to revert back to normal charges.
The relief measures were introduced to encourage cashless payments to curb the spread of coronavirus, that led to the increase of the value of M-Pesa transactions by 32.9 per cent to Sh9.04 trillion and it added 3.2 million one-month active customers.
“We are considering but we would want to see how consumers respond to volumes before we make a significant judgment on that,” said Ndegwa.
The volumes of M-Pesa transactions grew 14.9 per cent to Sh5.12 billion in the six months ended September.
Safaricom reckons that the free M-Pesa transfer cost it Sh9 billion in the six months to September, which saw the firm report a six per cent drop in net profit to Sh33.07 billion making it to be the first fall in nine years.
The estimated sh.9 billion revenue loss is equivalent to 25 per cent of the Sh35.88 billion Safaricom made from the M-Pesa platform in the six months to September and 7.2 per cent of total revenue in the same period.
Safaricom subscribers are charged between Sh10 and Sh28 for withdrawals of between Sh50 and Sh1, 000. Its fees for withdrawals of between Sh2,500 and Sh150,000 range between Sh50 and Sh300.
Banks and Safaricom are fretful that the CBK could extend the free service amid the spike in Covid-19 cases and fatalities.
Ndegwa said the telco may in future consider spinning M-Pesa from the main business as it seeks to broaden it into a financial service provider.
“In terms of whether we intend to spin-off M-Pesa as a separate business, from a structural perspective, that is something we will continue to review as Safaricom evolves so that we have an optimal corporate structure,” he said.
By Christabel Airo