This archive report was first published on 8 July 2020.
On June 24, the Central Bank of Kenya (CBK) extended the waiver on mobile money transaction fees under Sh1,000 for another six months, a move that could see Safaricom lose up to Sh15.3 billion in revenue.
The telecoms operator had petitioned the CBK to cap the number of multiple transactions between two numbers, citing a loss of Sh1.7 billion monthly due to customers splitting high-value transfers to avoid paying transfer fees.
According to a recent disclosure of conference call transcripts between Safaricom and investors, the firm had asked the banking regulator to lower the threshold for free mobile money transactions from Sh1,000 to Sh500 to cut revenue losses.
However, the CBK Governor Patrick Njoroge stated that the regulator reviewed the emergency measures and came out with the determination to extend the waiver to December.
Michael Joseph, Safaricom's director, disclosed in the transcript of a call made to investors on April 29 that the firm had been in discussions with the CBK to seal the loophole of splitting high-value M-Pesa transactions.
“We have pressurised the CBK to allow us to cap the number of split transactions at five. So far CBK has not obliged, but we are continuing to put pressure on them,” said Mr Joseph.
The free M-Pesa service has seen Safaricom lose an average of Sh1.8 billion monthly since mid-March, with the firm estimating that it could miss sales of up to Sh16.2 billion in the nine months to December.
Earlier data from the regulator showed that the daily average mobile phone money transactions of less than Sh1,000 grew by 83 percent to Sh1.98 billion daily between April 20 and May 10, while mobile transactions of more than Sh1,000 dropped 18.4 percent to Sh5.6 billion daily.
