Corporate News
An M-Pesa agent serves a customer in Nairobi. PHOTO | FILE
By DAVID HERBLING
In Summary
- The agents’ take-home grew by a quarter from Sh8.5 billion in 2013 driven by an increase in M-Pesa subscribers and a surge in the average number of transactions per customer.
- Safaricom spends Sh40 out of every Sh100 the telco earns from M-Pesa to compensate mobile money agents.
- The firm generated Sh26.5 billion in revenue from the M-Pesa service last year — representing nearly a fifth of total turnover.
Safaricom’s
M-Pesa agents earned total commissions of Sh10.6 billion in the year to
March 2014, equivalent to nearly half (40 per cent) of the mobile money
platform’s revenue.
The agents’ take-home grew by a quarter from Sh8.5 billion
in 2013 driven by an increase in M-Pesa subscribers and a surge in the
average number of transactions per customer.
Safaricom spends Sh40 out of every Sh100 the telco
earns from M-Pesa to compensate mobile money agents —offering a peek
into the sales commission model for the mobile money transfer service.
Safaricom generated Sh26.5 billion in revenue from the M-Pesa service last year — representing nearly a fifth of total turnover.
“Safaricom continues to push its transforming lives
agenda by providing direct employment and indirectly to over 200,000
people country wide,” said Nzioka Waita, the telco’s director of
corporate affairs.
The total number of M-Pesa agent outlets has grown
more than four-fold in the last five years to 81,025 shops from 17,653
in March 2010.
This means that each M-Pesa dealer earned an
average commission of Sh10,989 per month last year compared to a monthly
average of Sh35,668 in the fiscal year 2010.
Safaricom said it has turned to innovation by
developing additional mobile cash products to open new revenue streams
for M-Pesa agents.
“We continue to develop innovations that provide
additional ways for our agents to earn deposit commissions, these
include M-Shwari and the recently launched Lipa Na M-Pesa.”
A study funded by the Bill & Melinda Gates
Foundation attributes the declining earnings for mobile money agents to
the growth in number of agents and increased competition for clients.
“The large amount of agents in the market is
limiting profitability per agent, and driving dis-satisfaction from
agents,” says the research by Indian consultancy firm MicroSave.
The research sampled 2,113 mobile money agents
across Kenya’s major urban centres and rural areas through face–to–face
interviews at their business premises.
The MicroSave study shows that Kenyan mobile cash
agents earn the lowest commission of about Sh6,160 ($70) per month
followed by Uganda Sh6,864 ($78) with the most lucrative agents being in
Tanzania at Sh8,360 ($95).
“Tanzanian agents earn revenue from multiple providers due to high levels of non-exclusivity.”
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