Safaricom eyes SMEs in cash transfer deal for Lipa na M-Pesa with 8 banks

Corporate News

Safaricom chief executive Bob Collymore. PHOTO | SALATON NJAU |  NATION MEDIA GROUP

By DAVID HERBLING, hdavid@ke.nationmedia.com

In Summary

• The move mainly targets small and mid-sized businesses — the major users of Lipa na M-Pesa — by boosting their cash flows.
• Lipa na M-Pesa users previously had to wait for a minimum of six hours — or more especially on weekends and public holidays — to access their money after requesting for transfers from Safaricom to their bank accounts.
• The number of active Lipa na M-Pesa merchants — traders who accept Safaricom’s mobile money payments — doubled to 49,413 in the year ended March.

Safaricom has signed a deal with eight more banks to offer retailers real-time money transfer from the Lipa na M-Pesa tills to their banks accounts, a move aimed at recruiting more merchants to the telco’s mobile payment platform.

The move mainly targets small and mid-sized businesses — the major users of Lipa na M-Pesa — by boosting their cash flows.

Standard Chartered and NIC Bank in July pioneered the instantaneous transfers, meaning the new lenders will increase the options and availability of the service to traders.

READ: StanChart, Lipa na M-Pesa link up for real-time money transfer

The new institutions offering real-time Lipa na M-Pesa-bank transfers are KCB, Equity, Jamii Bora, Chase Bank, Co-op, DTB, UBA and Consolidated Bank.

Lipa na M-Pesa users previously had to wait for a minimum of six hours — or more especially on weekends and public holidays — to access their money after requesting for transfers from Safaricom to their bank accounts.

“These partnerships therefore aim to reduce the time to a minute or less, any day, any time,” said Bob Collymore, Safaricom chief executive.

“It not only reduces the inherent risks associated with cash handling, but also ensures merchants always have access to working capital which will definitely improve their business efficiency.”

The number of active Lipa na M-Pesa merchants — traders who accept Safaricom’s mobile money payments — doubled to 49,413 in the year ended March.

The volume of payments made to Lipa na M-Pesa service and Pay Bill numbers was recorded at Sh11.6 billion per month in the period.

The retail mobile payments platform has so far enlisted businesses such as airlines, hotels, supermarkets, public service vehicles, oil marketers and schools.

READ: Safaricom targets Nakumatt, Tuskys for Lipa Na M-Pesa

Safaricom charges retailers a one per cent transaction processing fee on the Lipa na M-Pesa service, which is cheaper compared to the average three per cent levy banks charge merchants to use their point of sale terminals.

Merchants will be allowed to transfer the virtual cash from their Lipa na M-Pesa accounts to their accounts held at the above banks from as little as Sh50 in one transaction, down from the current minimum of Sh35,000.

The maximum amount that can be transferred in a single transaction has also been raised to Sh50 million from the current Sh5 million. The cash will be available immediately including at ATMs.

Safaricom’s M-Pesa raked in Sh32.63 billion or a fifth of total revenue in the year to March, a pointer that mobile money is emerging as a steady income stream.Bank of Kenya.