Back in March as the effects of the current pandemic were being felt, Safaricom and the other industry players had talks with the central Bank of Kenya to waive the charges for all transactions below Ksh 1,000. This was to make sure those who were sending any amount below that through M-Pesa could do so for free and this was meant to ease the financial strain that they could experience because of the pandemic.
The free cash transfer period was to go all the way to June (last month) and it did and since the pandemic is still with us, it was extended further to December 2020.
This extension is all good for the customers but for the telcos, Safaricom to be exact, it is not all that great. The network operator has taken a hit and that is why the company wanted free M-Pesa transactions to be capped to five per user. The CBK has so far rejected this bid.
According to Safaricom, M-Pesa users would split large transactions into smaller ones (below Ksh 1,000) to avoid paying the transaction fees. The telco petitioned the Central Bank of Kenya to limit the number of multiple transactions between two numbers to stop people from avoiding the transaction charges.
Split Transactions to Less Than Ksh 1,000
Business Daily is reporting that users could split transactions as high as Ksh 60,000 into smaller ones below Ksh 1,000 and with that they are able to save Ksh 105. This may not seem like a huge number but for people who have the time, it may be perfectly fine with them as they are saving some money. Safaricom on the other hand is losing some money with such moves and that is why the company wanted free transactions capped to 5.
Lower Free Mobile Transactions
Besides the capping of transactions, Safaricom also wanted the threshold for free mobile money transaction to be lowered from Ksh 1,000 to Ksh 500. This according to Safaricom will help cut its losses going forward.
Safaricom has seen an average loss of Sh1.8 billion monthly since mid-March and if this continues, the company may miss its targets by the end of the year. Safaricom may appeal this as they have been pressuring the Central Bank for a couple of months to no progress but as this hurts their bottom line and they have to do everything they can to reverse that.
Also Read: This is What the Safaricom Lipa Na M-Pesa App for Business Owners Can Do
