Safaricom’s M-Pesa has recorded its first ever decline in the number of agents following the introduction of a new policy that locks tills to specific locations to combat fraud.
Under the concept known as geo-locking, Safaricom only allows M-Pesa agents to operate tills within designated geographical locations.
This means that should an operator relocate from a designated location, the till automatically shuts down and customers cannot withdraw or deposit cash.
A new disclosure by the telco shows that 8,344 M-Pesa agents closed down in the year to March 2024, ostensibly disillusioned by the new policy, which forces them to operate in a specific location at all times.
“We experienced a decline in active agent numbers [in the 2024 financial year] due to the introduction of geo-locking for tills,” Safaricom said in a new report.
The number of M-Pesa agents declined to 262,016 in March 2024, a three percent drop from last year’s 270,360, an unusual drop in what has been a source of livelihood or income for thousands in the country.
For Safaricom, while the drop in agents may not be a good indication for the M-Pesa business, the new policy will help it deal with the longstanding fraud menace, which has cost agents and customers millions of shillings.
“While this has led to a reduction in active agents, it has effectively curtailed fraud,” Safaricom said.
The geo-locking of tills “has in turn led to increased compliance from a regulatory point of view.”
“It has also enabled the identification of areas of opportunity based on the current tills operating in a market.”
The telco has recorded a surge in the number of fraud cases investigated, more than tripling from 33 last year to 103 this year, partly due to the inclusion of its Ethiopian unit in the tally.
However, the number of cases of asset misappropriation, which includes theft of tills, declined to zero, while the majority of the fraud cases it investigated were related to breaches of policies and unauthorised access by staff.
In general, the number of mobile money agents over the same period declined by only 873, meaning that while Safaricom’s M-Pesa agents dropped, other mobile money service providers – Airtel Money and T-Kash, saw a rise in the number of agents.
The number of mobile money subscriptions, transactions, and the total value of transactions also grew over the same period, indicating that the industry has remained resilient despite M-Pesa agent exodus.
