Consumers defy rise in tariffs raising mobile cash to Sh2.1trn

Consumers defied a partial rise in M-Pesa tariffs to push up by one-quarter cash sent through mobile platforms in the first 11 months of last year, surpassing the 2013 total.

Latest Central Bank of Kenya (CBK) data shows mobile payments grew 24.8 per cent to total Sh2.1 trillion as at the end of November, exceeding the Sh1.9 trillion handled in the full year 2013.

This means Kenyans moved an average of Sh6.4 billion everyday through mobile money compared to Sh5.2 billion daily in the first 11 months of 2013.

This is despite Safaricom’s decision to raise M-Pesa (which makes up 60 per cent of total transfers) charges from September last year for those sending more than Sh1,500 through its platform.

READ: M-Pesa users face tariff raise for amounts above Sh1,500

Safaricom CEO Bob Collymore said M-Pesa charges are still within the reach of many and the convenience and increased scope would continue to power growth.

“Mobile money transfer costs are still relatively inexpensive. It is so very convenient. We recognise the importance of accessibility to the customer,” said Mr Collymore in an interview with the Business Daily.

He said transaction fees for lower value transactions of below Sh1,500 were reduced ‘‘because we felt that the poor were carrying a disproportionate burden in percentage terms’’.

Kenya has 24.9 million mobile money users who transact across six platforms – M-Pesa, MobiKash, Airtel Money, yuCash, Orange Money and Tangaza – backed by a network of more than 121,000 agents.

CBK governor Njuguna Ndung’u credited the increased uptake of mobile money to the growing number of banks and microfinance institutions partnering with the telcos.

“Mobile phone financial services is a way of life now. It is a platform where a menu of financial services is provided with ease and convenience, but more importantly, efficiently,” said Prof Ndung’u.

Safaricom’s M-Pesa has 80 per cent of mobile cash subscribers and controls two-thirds of total agents.

Mr Collymore further attributed the growth of mobile money to an increasingly cash-lite economy where mobile cash is used to pay for shopping, utility bills and for welfare transfers to poor households.

CBK data shows that the average value per mobile transaction during the first 11 months of last year was Sh2,600.

The cost of sending Sh3,000 through M-Pesa to a registered user is now Sh55 compared to the earlier Sh33.

Airtel money does not charge any fees to send money but it costs Sh45 to withdraw Sh3,000 for both registered users and those from other networks.

The amount of money sent in September, when M-Pesa reviewed its fees, remained flat at Sh206 billion but grew to Sh210 billion in October.