The value of free cash transfers between bank accounts and Safaricom's M-Pesa mobile wallets rose by half to Sh3.73 trillion in the six months to September as zero rating of fees continued to drive usage.
These transactions accounted for a fifth of the total value of M-Pesa deals of Sh18.09 trillion in the review period, Safaricom said on Friday when releasing its half year results.
“M-Pesa wallet to bank and bank to M-Pesa wallet transactions are still zero rated and make up 20.6 percent of the total value of M-Pesa transactions,” the telco said in a statement.
The waiver of charges on transfers between mobile money wallets and bank accounts has been in place since March 2020, helping households and businesses to save billions of shillings.
Banks and telcos, led by Safaricom, have meanwhile lost substantial revenue.
Before the financial reliefs were introduced, most bank-to-M-Pesa transactions attracted fees ranging from Sh30 to Sh197, and were an important source of non-funded income for the lenders.
Safaricom chief executive Peter Ndegwa told the Business Daily on Friday that should the fees be reinstated, the telco expects that the charges levied will likely be lower compared to the pre-Covid levels, similar to other general reductions in fees on services such as Fuliza and cash transfers.
The use of M-Pesa to facilitate bank transactions has gone up since the waiver of the fees, which marked part of a range of incentives meant to encourage cashless payments on mobile phones to contain the spread of the coronavirus.
Most of the emergency measures expired at the end of last year but the waiver of fees on bank-to-mobile transactions has remained.
Banks have protested the waiver of the fees in the past 10 months, citing heavy investments in digital technology to keep pace with the growing volume of transactions in their argument for a reinstatement.
The charges formed a substantial part of the lenders’ non-interest income. Return to charging on the transactions is expected to further boost bank earnings, especially for those with millions of retail accounts.
The waiver triggered an increase in transactions, particularly for small businesses, which embraced the digital channels for their banking activities due to efficiency and safety compared to physically transporting cash to banking halls.
