Merchants will also be charged a flat fee of Sh200 for all transactions above Sh40,000.
Lipa Na M-Pesa PayBill and gaming merchant tariffs, and Lipa Na M-Pesa petrol station tariffs will not be affected by these changes.
The telco is facing competition in the mobile money space after banks launched their PesaLink product.
Safaricom has cut fees associated with selling goods through its Lipa na M-Pesa service by half as it seeks to increase the number of merchants using the payment platform.
While customers do not incur a fee when they buy goods via Lipa na M-Pesa, merchants currently pay one per cent of the value of all transactions above Sh100.
The fee will from next week be cut in half to 0.5 per cent of a transaction’s value.
These fees will be capped at Sh200 for all payments above Sh40,000.
Safaricom yesterday also announced that it will eliminate merchant fees for all transactions below Sh200.
“We trust that this development will boost the attractiveness of the Lipa na M-Pesa platform to more small and medium enterprises while making the service more affordable compared to other alternatives in the market,” said Safaricom chief executive Bob Collymore. The telco has also struck a deal with 23 banks which will cut down on the time it takes for Lipa na M-Pesa payments to reflect on merchant bank accounts.
This process previously took days but Safaricom now says it has been cut down to seconds. Pay Bill services and payments made to gaming companies and at petrol stations will not be affected by the new tariff structure.
Safaricom is extending its M-Pesa Kadogo tariff band under which the company last year eliminated fees for all transactions below Sh100.
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