Peter Ndegwa. He is the new Safaricom CEO having been appointed by the company's board. www.businesstoday.co.ke
Safaricom CEO Peter Ndegwa The firm is mulling cutting M-Pesa charges to boost volumes [Photo/BusinessDay Media]

Safaricom is deliberating on whether to slash M-Pesa charges in an attempt to retain higher volumes following a huge dip in revenue from this pool after the Central Bank of Kenya (CBK) zero-rated transactions below Ksh1,000 as an economic COVID-19 intervention measure.

The Business Daily on Thursday reported that Safaricom Chief Executive Peter Ndegwa has hinted that the company may offer lower rates to attract more customers to join the service and to woo customers who increased their transaction frequency following the CBK directive.

CBK announced the removal of charges on M-Pesa transactions of up to Sh1,000 from March 16 and extended the offer to December 31, a period when bank-to-mobile phone transactions would also be free.

The relief measures helped increase the volumes of transactions on the fintech platform raising the value of M-Pesa transactions by 32% to Ksh9.04 trillion.

“We are considering but we would want to see how consumers respond to volumes before we make a significant judgment on that,” the publication quoted the Chief Executive.

“It is something we are looking at and we intend to reduce our transaction costs over time. How quickly we do that is something we want to judge but certainly we haven’t made a decision yet at this stage.”

The volumes of M-Pesa transactions grew 14.9 per cent to Sh5.12 billion in the six months ended September.

In the recently announced Half Year results, Safaricom’s M-Pesa earnings slumped by 14.5% to Ksh35.9 billion from Ksh42 billion during the comparable periods under review which informs the firm’s strategy rethink.

The firm charges its subscribers between Ksh10 and Sh28 for withdrawals of between Ksh50 and Ksh1, 000. It charges between Ksh50 and Ksh300 for transactions between Ksh2,500 and Ksh150,000.

Safaricom is wary that its M-Pesa revenue could continue bleeding especially as the Ministry of Health (MoH) has warned of a second wave of Coronavirus.

Safaricom and banks are pushing for the CBK to involve them should the regulator decide to extend the tenor of free transactions beyond December.

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