NIC enters bulk M-Pesa payments deal with Safaricom

What you need to know:

NIC joins a growing list of banks that have signed up with Safaricom to offer medium-sized firms a platform for making bulk payments.
More than 20 companies are signed up to the firm’s bulk payment systems, generating fees and commissions for Safaricom and partner institutions.
The bulk transactions attract a flat fee charged as a percentage of the value transferred.

Safaricom has signed a deal with NIC Bank that will enable the lender’s customers to make bulk cash transfers riding on the telecom firm’s M-Pesa mobile money service.

NIC joins a growing list of banks that have signed up with Safaricom to offer medium-sized firms a platform for making bulk payments to casual employees or those working in distant locations.

More than 20 companies are signed up to the firm’s bulk payment systems, generating fees and commissions for Safaricom and partner institutions. The bulk transactions attract a flat fee charged as a percentage of the value transferred.

Safaricom itself uses M-Pesa to distribute its dividends to more than 150,000 individual shareholders, most of who own less than 1,000 shares.

In the deal with NIC Bank, the bank’s corporate customers will process bulk M-Pesa payments through its Internet portal dubbed NIC Online.

Platform

Beneficiaries will receive the payments in a matter of minutes with a confirmation report being sent to the customers by email.

“Our corporate customers can now process bulk M-Pesa payments conveniently through NIC Online from the comfort of their offices without any manual interventions,” said NIC chief executive officer John Gachora.

READ: Barclays targets bulk payments in M-Pesa deal

The service is targeting firms with daily or weekly obligations such as paying wage earners. It will also allow the corporate customers to pay dividends and pension to beneficiaries.

“With this proposition, we are not only making it more convenient for the bank’s corporate customers, but also demonstrating that they too can delight their customers while deriving efficiency in their operations, convenience and save on costs,” said Safaricom chief executive officer Bob Collymore.

Safaricom is aggressively pushing the M-Pesa service to take a larger share in the cashless payment systems, with the service evolving from a money transfer service to a payments platform.

The telco sees the service as one of its key growth drivers besides data, with the contribution of the voice business declining over the years.

M-Pesa revenues grew 21.6 per cent to Sh26.5 billion in the year ended March, accounting for 18.3 per cent of the telco’s turnover of Sh144.7 billion in the period.