The treasury is working on measures to reduce M-Pesa transfer charges following rising concerns among consumers and small businesses. The fintech service is Safaricom’s most profitable venture, commanding 98 percent of the country’s mobile money market share according to a November 2020 report.
“Another source of concern with mobile money stems from the perception both by consumers and small businesses that the rents from digital technology are unfairly accruing to Safaricom Plc,” said Mr Yatani.
Addressing the Senate, Treasury Cabinet Secretary Ukur Yatani said it was necessary to make M-Pesa cheaper as it had become deeply entrenched in Kenyans’ businesses and daily lives.
“This is in the area of unconscionable/excessive rates and Safaricom being a critical trading partner for SMEs and consumers… We will soon be presenting some proposed amendments to deal with this scenario.”
According to a previous report by the treasury, a number of financial services are interlinked with M-Pesa and in the event that the service collapses, there would be a widespread disruption to the economy.
The Treasury said the the money transfer system is now among other possible threats to the economy being closely monitored by policymakers, as a technical failure affecting M-Pesa-dominated mobile transactions has become a fiscal risk.
Safaricom is Kenya’s largest company by market capitalization, surpassing the country’s two other mobile operators, Airtel Kenya and Telkom Kenya. However, its mobile money transfer charges are higher compared to the two rivals.
For instance, M-Pesa transfer charges, including sending and withdrawal of Sh5,000 costs Sh159 compared to Sh75 on Airtel network. It costs Sh405 to transfer Sh25,000 on M-Pesa and Sh160 on Airtel.
Smaller carriers have long claimed that Safaricom has a monopoly because it generates 90% of income in areas like mobile money transfers, voice calls, and text messages.
Since the inception of M-Pesa in 2007, the mobile money transfer service has grown to offer fully fledged financial service offering loans, savings and merchant payment services.