StanChart, Lipa na M-Pesa link up for real-time money transfer

Businesses that use Safaricom’s Lipa na M-Pesa mobile phone payments system and are StanChart Kenya’s customers will get real-time transfer of money to their accounts after the two companies signed an agreement to hasten the transactions.

Lipa na M-Pesa users previously had to wait for a minimum of six hours (or more especially on weekends and public holidays) to access their money after requesting for transfers from Safaricom to their bank accounts.

Safaricom and Stanchart on Wednesday said they had integrated their systems, enabling the real-time settlements that are expected to boost cash flows for Lipa na M-Pesa users who are mainly small and medium sized businesses.

“Standard Chartered continues to refine its product offering and delivery model, to provide solutions that are in line with the market dynamics,” the bank’s CEO Lamin Manjang said in a statement.

The businesses will transfer the virtual cash from Safaricom to their StanChart bank accounts from as little as Sh50 in one transaction, down from the current minimum of Sh35,000.

The maximum amount that can be transferred in a single transaction has also been raised to Sh50 million from the current Sh5 million. The cash will be available immediately including at ATMs.

READ: M-Pesa, Stanchart deal enables firms to move up to Sh50m per transaction

The fund transfers will be allowed only from a merchant’s headquarters or through a PayBill to PayBill Number belonging to their bank. 

“Since launch eight years ago, M-Pesa has emerged as the biggest and perhaps the most important positive disruption to the financial services space,” said Safaricom’s CEO Bob Collymore in a statement.

“This has been made possible by strategic partnerships … that have been informed by the need to develop solutions to common day problems faced by our common customers.”

This is the latest deal signed between Safaricom and third parties like banks and merchants as it seeks to entrench M-Pesa as a comprehensive financial services platform.

It marks yet another evolution of M-Pesa, which started as a person-to-person money transfer service.

Safaricom has signed deals with hundreds of partners that have seen M-Pesa emerge as a payments, savings, micro-credit, and bulk money transfers platform.

The firm says it has inked deals with 40 banks that extend M-Pesa services to their customers.

It also has over 2,000 pay bill partners and 139,000 merchants who accept payment for goods and services through the mobile-based platform.

For Safaricom, the transformation of M-Pesa into a comprehensive financial services platform is at the heart of its diversification and growth strategy.

M-Pesa revenues grew 23 per cent to Sh32.6 billion in the year ended March, recording the largest absolute turnover after voice business on which Safaricom is reducing its reliance.

The success of M-Pesa has however drawn the attention of rivals and sector regulator the Communications Authority of Kenya that has proposed competition rules which analysts say could hurt Safaricom.

“Specifically, the M-Pesa platform will likely be considered as a national payment platform where competitors will be billed on cost rather than on market determined negotiated rates (which would have allowed for a profit element),” reads part of a review by Standard Investment Bank.

The proposed rules will automatically restrict operations of dominant firms, with Safaricom taking the heat as it holds a market share of over 60 per cent in various segments such as voice.