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Economy

M-Pesa dominance defies cross-network transfers

Safaricom cut fees for sending money to a
Safaricom cut fees for sending money to a registered Airtel Money subscriber by a similar amount as a registered M-Pesa user. FILE PHOTO | NMG 

The introduction of cross-network money transfers via mobile phones in April has failed to cut M-Pesa’s dominance with Airtel shedding market share over the period, industry data show.

Data from the Communications Authority of Kenya (CA), the sector regulator, indicate Airtel Money's share shrank to 0.057 per cent at the end of September compared with 0.10 per cent in March. Its money transfer service handled Sh1.15 billion in three months to September, a drop from the Sh1.88 billion in the quarter to March—just before the introduction of cross-network service.

Safaricom’s #ticker:SCOM M-Pesa moved Sh1.59 trillion in the quarter to September, up from Sh1.48 trillion in the three months to March in a growth that earned it a market share of 78 per cent.

The government pushed for the seamless cross-network transfers will help level the market and reduce Safaricom’s dominace, ICT minister Joe Mucheru said when the service was launched.

Subscribers of Safaricom and Airtel have from April been able to transfer and receive cash from one mobile network to another in a move aimed at leveling the market and boost competition among operators.

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Previously, a customer would receive an SMS from another network notifying them that money had been sent.

They would then have to look for an agent of the network from which the money was sent to withdraw and then deposit the same into their own wallet.

The seamless transfer of cash also cut money transfer fees by up to 75 per cent between Safaricom and Airtel. Transaction fees between the two mobile money wallets is down by between 40 per cent and 75 per cent compared to what was previously charged.

Safaricom cut fees for sending money to a registered Airtel Money subscriber by a similar amount as a registered M-Pesa user.

Airtel also lowered its cross-network fees with the reduced charges being part of the approval by the Central Bank of Kenya (CBK).

But the reduced cost and ease of receiving cash across networks has not eased M-Pesa’s grip of the money transfer market, which moved Sh2.03 trillion in the three months to September.

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