When the corona virus pandemic was declared and several measures put in place to help curb its spread as well as provide a much-needed relief to Kenyans, some of the provisions put in place such as cutting down on cashless transaction costs have become popular with time. Safaricom is apparently contemplating on reducing MPESA transaction costs as a way of boosting business volumes which in turn promotes the service by allowing more people to use it.
Kenya’s financial regulator the Central Bank of Kenya unveiled several regulations aimed at providing relief to Kenyans hit hard by the pandemic, amongst of which was eliminating transaction costs on amounts transferred less than Ksh. 1,000. As a result, Safaricom which operates the biggest mobile money service in the country – MPESA witnessed increased business volumes during the period as more people resorted to cashless transactions and in this case MPESA mainly being preferred.
According to the company’s Chief Executive Officer Peter Ndegwa, the telco may after all reduce transaction costs targeting to retain more customers after the fact, more so those who utilized MPESA because of zero transaction costs. Transactions costs between banks and mobile money services were also zero-rated, allowing Kenyans to use cashless payments without incurring additional costs. The move also reduced the number of teller machine transactions across various banks in the country.
During the initial stages of the covid-19 pandemic, the Central Bank of Kenya unveiled several guidelines that would help Kenyans practice social distancing and reduce exposures to the virus. MPESA charges on amounts less than Ksh. 1,000 were removed from March 16th and later extended until December 31st 2020.
The measures were aimed at promoting cashless transactions which resulted in increasing MPESA transactions by 32.9 percent to Ksh. 9.04 trillion. There were also an additional 3.2 million new customers. Apparently, the mobile service provider is now keen to keep this numbers by effectively cutting down on some transaction costs.