The new tariffs, which are set to take effect from Thursday will see transaction fees reduced by up to 67 percent in the low and medium tiered bands which include the transfer of amounts ranging between Sh10 and Sh1,500.
The operator has also rationalised the tariffs for sending higher amounts exceeding Sh1,501 to an average of 0.8 percent of the money being transferred.
The 0.8 percentage fee will however see fees for sending higher amounts rise, depending on the amount sent.
“We have spent a considerable amount of time analyzing M-PESA usage trends and we have established that over 65 percent of all M-PESA person to person transactions are within the Sh10-Sh1, 500 bands” said Safaricom’s Chief Executive Officer Bob Collymore.
Collymore explained that withdrawal tariffs as well as the transaction fees for Lipa Na M-PESA and all other tariffs, will remain unchanged, following the tariff review announced on Tuesday.
“Our financial services portfolio now contributes close to 20 percent of our overall revenues and pushing through a tariff reduction of this magnitude is an expression of confidence in our longer term strategy to drive the growth of a cash-lite economy that delivers financial inclusion to millions of Kenyans through the convenience and affordability of our financial products, ” Collymore said.
The telco is also preparing to move the M-PESA’s backbone infrastructure from Germany to Kenya, in an investment that will open up more opportunities for cashless transactions within the country.
M-PESA was introduced in 2007 and has grown to have over 19.3 million customers, which is more than 80 percent of the country’s adult population.
The move comes as other new players are set to enter into the market, among them Equity Bank which is set to launch its Mobile Virtual Network Operator (MVNO) once they get approval from Communication Authority of Kenya.
The bank plans to charge mobile money transfers at one percent of the transaction value compared to the prevailing market charges of 16 percent while instant loans will be available at a maximum of two percent per month compared with the 7.5 percent per month offered in the market.
Kenya Airways is also planning to launch its MVNO subject to regulatory approval providing cellular mobile services including customer registration, SIM card issuance, billing and customer care to end users.