Safaricom to reduce transaction costs among it’s members from 1st January

Safaricom has announced lower paybill charges for money transactions between customers and businesses with effect from January 1, next year, amid increased demand for mobile payment services.

Safaricom will on the same day also reinstate charges for transactions between bank accounts and M-Pesa following a two-and-half-year waiver of payment of the charges.

“In our role to continue supporting the economy and stimulating growth, we have taken the initiative to reduce significantly our paybill and business-to-customer tariffs. This move reaffirms our commitment to support all our customers and enable them cost-effectively get along with their lives, especially at this time when most Kenyans are experiencing hard economic times,” said Safaricom Chief Executive Peter Ndegwa.

The reduction of paybill charges comes at a time many businesses have switched to using the platform after ditching the Lipa Na M-Pesa Buy-Goods payment option that eats into their incomes.

Safaricom has also announced new charges for transactions between bank accounts and M-Pesa where bank to M-Pesa transaction charges have been reduced by an average of 61 percent and M-Pesa to bank charges have been reduced by an average of 47 percent, said the company.

This is after the Central Bank of Kenya (CBK) last week announced the reintroduction of charges for transactions between mobile money wallets and bank accounts after negotiation with banks and mobile money payment firms.

The CBK waived the charges in March 2020 as part of emergency measures that were put in place by the government to facilitate the use of mobile money to prevent the spread of the Covid-19 disease.

“The reduced M-Pesa to bank tariff will also apply to all M-Pesa paybill payments that customers use for utilities such as electricity, hospital bills, schools, government payments etc. to ensure affordability,” said Safaricom.

Reinstatement of the charges will boost the earnings of lenders who record income from transactions as part of their non-funded income, and mobile network operators who derive significant sums of their income from mobile money transactions.

The CBK said the number of Kenyans actively using mobile money increased by over 6.2 million during the waiver period, while the monthly volume and value of person-to-person transactions increased from 162 million transactions worth Sh234 billion to 440 million transactions worth Sh399 billion.

Further, the monthly volume and value of transactions between payment service providers (PSPs) and banks increased from 18 million transactions worth about Sh157 billion to over 113 million transactions worth Sh800 billion.

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