This archive report was first published on 7 July 2020.
Published on July 7, 2020, the Central Bank of Kenya's waiver on mobile money transactions below KSh 1,000 has had a significant impact on Safaricom's revenues. The telco had petitioned the regulator to cap the number of free transactions between two people at five, in a bid to protect its revenues.
According to Michael Joseph, former Safaricom CEO, the company had 'pressurized the CBK to allow us to cap the number of split transactions at five.' However, the regulator has not obliged, and Safaricom is continuing to put pressure on them.
Records from the Central Bank show that mobile money transactions for amounts below KSh 1,000 grew significantly, at the expense of transfers above KSh 1,000. Transactions between KSh 100 – 1000 grew by over 1.5 million transactions, whereas transactions between KSh 1001 – 10,000 fell by 0.5 million in the first two months of the waiver.
Revenues Under Threat ¶
Safaricom is losing an estimated KSh 1.8 billion per month due to the waiver, which could cost the company KSh 16.2 billion in revenues by the end of the year.
Other players in the mobile money industry are also affected by the waiver. Equity Group CEO James Mwangi estimates that the waiver is costing the bank up to KSh 120 million a month in revenues.
