Safaricom M-Pesa transfers across borders hit Sh17bn

Corporate News

 

A customer is served at an M-Pesa outlet in Nairobi. PHOTO | FILE 

By OKUTTAH MARK, mokuttah@ke.nationmedia.com

In Summary

• Safaricom says the uptake of M-Pesa cross border transfers has been growing, and it anticipates more customers will sign up as they appreciate the speed, safety and security that the service offers.

The value of cross-border M-Pesa transactions has hit Sh17 billion four years since the service was introduced, indicating a high growth potential for mobile money transfers in facilitating international remittances and business transactions.

Safaricom signed its first international mobile money transfer agreement with the Western Union in 2011. This was followed by another agreement with Money Gram in 2014, allowing the firm to it to tap a chunk of transaction commissions from international remittances.

Regionally, the telco launched M-Pesa cross border services in Tanzania in February after acquiring a cash remittance operating licence from Central Bank of Kenya in 2014, followed by a similar launch in Rwanda in May and another one in Uganda last month. 

The Safaricom director for financial services Betty Mwangi-Thuo said the uptake of M-Pesa cross border transfers has been growing, and the firm anticipates more customers will sign up as they appreciate the speed, safety and security that the service offers.

She said the Sh17 billion account for international transfers “in both inbound and outbound transactions.”

The new CBK money remittance licence opened the door for M-Pesa to facilitate outwards cash transfer services it could not offer previously.

Prior to the issuance of the new licence by CBK Safaricom’s cross-border operations had been restricted to cash inflows only.

The availability of the M-Pesa services in neighbouring countries was made possible through agreements signed with Vodacom (Tanzania) and MTN (Uganda and Rwanda).

READ: M-Pesa now enters Uganda in Safaricom, MTN pact

Under the cross boarder M-Pesa services the minimum amount one is able to send is Sh100, while the maximum per transaction is Sh70,000, with a total daily Limit of Sh140,000.

The cost of international remittances through traditional channels like banks or money transfer operators can be up to 31 per cent of the transaction, depending on the service provider.

However, under the agreement with Vodacom, Safaricom subscribers sending money to Vodacom’s M-Pesa network would be charged one per cent of the value of transaction plus an exchange rate fee. The same will also apply to Vodacom M-Pesa clients.

Users receive money in their local currency, and are able to access updated rates which are updated daily.

Customers can check this  by dialling *840#, Enter, their Service PIN, Enter, the amount in Kenya Shillings that one want to send, and then enter the destination phone number in international format.

“While we cannot attribute any growth specifically to the introduction of the new service, we are confident that the cashless revolution that has seen an unprecedented impact on the Kenyan economy over the past eight years will now unlock not only intra-African remittances but also serve as a catalyst for trade and economic growth in the region,” said Ms Mwangi-Thuo.