The push to reduce M-Pesa transaction fees continues to gather steam, with the National Treasury becoming the latest entity to add its voice to the debate.
Cabinet Secretary Ukur Yattani told a Senate committee probing Safaricom’s alleged dominance-abusing practices that amendments were being lined up to protect consumers. Safaricom’s M-Pesa controls a 99.9% share of Kenya’s mobile money market.
With its 35% stake, the Treasury is the second-largest shareholder in Safaricom behind Vodacom Group Limited and Vodafone Group Plc own a combined 40 percent.
“Another source of concern with mobile money stems from the perception both by consumers and small businesses that the rents from digital technology are unfairly accruing to Safaricom Plc,” Yattani stated.
“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,” the CS added.
Yattani’s comments follow a disclosure by Central Bank of Kenya (CBK) Governor Paul Njoroge before the same committee that they were in talks with Safaricom to split up its telco and mobile money arms.
The changes are intended to enable greater regulatory oversight on M-Pesa by CBK.
Njoroge stated: “Our view is we need to ring-fence the financial services they are providing and ensure they are not tampered with in terms of finances by the large telco side of business.”
“In effect, they will create the equivalent of another subsidiary, which will be the mobile money entity. What will emerge is a holding structure where Safaricom will have a group sort of arrangement, and all the other subsidiaries are connected to it, and the links between the mobile money and the group will be clear, transparent and simple.”
M-Pesa revenues for the full year ending March 2021 stood at Ksh82.64 billion. The service has over 30 million active users.
The cost of sending and withdrawing money, as well as challenges on inter-operability, have fueled growing sentiment to review fees associated with the service.