M-Pesa beats 34 banks in global cash transfers list

Safaricom is edging towards ranking among Kenya’s top 10 largest international money transfer agents, beating 34 commercial banks in market share terms, less than five years since its foray into the cross-border cash remittance business.

The latest Central Bank of Kenya money transfer data for up to August shows the telecommunications firm now handles slightly more than four per cent of all cash remitted to Kenya from foreign countries.

International M-Pesa cash transfers totaled Sh3.39 billion ($38.03 million) between January and August this year, ranking the mobile cash platform eleventh with a market share of 4.06 per cent.

Safaricom is riding on the popularity and vast agent network of its mobile money platform M-Pesa to win a bigger share of Kenya’s diaspora inflows, which grew 11 per cent to top Sh83.5 billion ($936.03 million) as per the CBK data to the end of August.

“Through partnerships, our customers and their friends and families will benefit from affordable, faster and more convenient international remittances,” said Nzioka Waita, Safaricom’s director of corporate affairs in an interview.

Equity Bank is in pole position having handled Sh10.3 billion or 12.36 per cent of total remittances sent in the eight months to August followed by Co-operative Bank, which processed Sh8.7 billion or 10.36 per cent.

Diamond Trust Bank is ranked third having moved Sh7.5 billion (9.07 per cent).

Safaricom has in recent months signed up five additional global money transfer providers to allow Kenyans abroad send money directly to its customers’ M-Pesa accounts.

The Nairobi bourse-listed telco has signed partnership deals with Australia-based mHITs, British firm SkyForex, PostFinance of Switzerland, London-based provider Xendpay and Mapex to offer direct cash transfers to M-Pesa customers abroad.

The new partnership agreements are in addition to earlier deals signed with remittance channels such as Western Union, Xpress Money, Skrill iT and WorldRemit.

READ: Safaricom targets diaspora cash in deal with UK firm

The telco is set to add MoneyGram to its list of international money transfer services by the end of this year.

The new mobile-based money transfer partners will increase M-Pesa’s geographical presence to cover Europe, North America, Australia, the Middle East and Asia where there are significant Kenyan migrants.

CBK statistics show M-Pesa has only been receiving inward remittances from Europe, attributed to Safaricom’s deal with Western Union in March 2011.

M-Pesa’s expanded list of global money transfer providers takes the battle for the control of diaspora cash to the doorstep of commercial banks that currently dominate the remittances market by acting as cash agents for providers such as MoneyGram, Western Union and Xpress Money.

KCB Bank is ranked fourth with Sh7.3 billion followed by Chase Bank (Sh7.2 billion), CfC Stanbic (Sh6.8 billion), NIC Bank (Sh5.2 billion), Western Union-Postbank (Sh4.7 billion), First Community Bank (Sh4.1 billion) and Barclays in tenth position, having handled Sh3.4 billion.

Safaricom is banking on the convenience of consumers receiving money on their mobile handsets and going to any of its 81,025 M-Pesa agents to withdraw the money rather than going to a bank as a major attraction for customers.

The telco, which has 19.3 million registered M-Pesa users, said customers are not charged for receiving diaspora remittances via M-Pesa.