Safaricom M-Pesa transfers across borders hit Sh17bn

The value of cross-border M-Pesa transactions has hit Sh17 billion four years since the service was introduced, indicating a high growth potential for mobile money transfers in facilitating international remittances and business transactions.

Safaricom signed its first international mobile money transfer agreement with the Western Union in 2011. This was followed by another agreement with Money Gram in 2014, allowing the firm to it to tap a chunk of transaction commissions from international remittances.

Regionally, the telco launched M-Pesa cross border services in Tanzania in February after acquiring a cash remittance operating licence from Central Bank of Kenya in 2014, followed by a similar launch in Rwanda in May and another one in Uganda last month. 

The Safaricom director for financial services Betty Mwangi-Thuo said the uptake of M-Pesa cross border transfers has been growing, and the firm anticipates more customers will sign up as they appreciate the speed, safety and security that the service offers.

She said the Sh17 billion account for international transfers “in both inbound and outbound transactions.”

The new CBK money remittance licence opened the door for M-Pesa to facilitate outwards cash transfer services it could not offer previously.

Prior to the issuance of the new licence by CBK Safaricom’s cross-border operations had been restricted to cash inflows only.

The availability of the M-Pesa services in neighbouring countries was made possible through agreements signed with Vodacom (Tanzania) and MTN (Uganda and Rwanda).

READ: M-Pesa now enters Uganda in Safaricom, MTN pact

Under the cross boarder M-Pesa services the minimum amount one is able to send is Sh100, while the maximum per transaction is Sh70,000, with a total daily Limit of Sh140,000.

The cost of international remittances through traditional channels like banks or money transfer operators can be up to 31 per cent of the transaction, depending on the service provider.

However, under the agreement with Vodacom, Safaricom subscribers sending money to Vodacom’s M-Pesa network would be charged one per cent of the value of transaction plus an exchange rate fee. The same will also apply to Vodacom M-Pesa clients.

Users receive money in their local currency, and are able to access updated rates which are updated daily.

Customers can check this  by dialling *840#, Enter, their Service PIN, Enter, the amount in Kenya Shillings that one want to send, and then enter the destination phone number in international format.

“While we cannot attribute any growth specifically to the introduction of the new service, we are confident that the cashless revolution that has seen an unprecedented impact on the Kenyan economy over the past eight years will now unlock not only intra-African remittances but also serve as a catalyst for trade and economic growth in the region,” said Ms Mwangi-Thuo.

Since the Kenyan launch of M-Pesa in 2007, the service has gained great traction locally and internationally, raising the country’s profile as a mobile money service success story.

Kenyans, for instance, transacted Sh2.31 trillion as at the end of October, nearly equalling the Sh2.37 trillion handled in 2014.

This means Kenyans made an average of Sh192.7 billion of real-time mobile-based payments monthly, or Sh6.4 billion a day in the period to October 2015 compared to Sh5.4 billion daily in a similar period last year.

Safaricom has grown its M-Pesa subscriber base to 22.1 million from 14.9 million in 2012.

The mobile money transfers are done through a large network of agents that now stands at 135,724 from 39,401 in 2012.

Official data shows Safaricom’s M-Pesa handles about Sh60 out of every Sh100 transacted on mobile money platforms in Kenya, accounts for three-quarters of mobile cash subscribers and controls two-thirds of total agents.