Safaricom suspends high transfer fees for Equitel
Kenya
,
10 Sep 2015
Safaricom suspends high transfer fees for Equitel
After a row with Equitel over an increase in charges for M-Pesa transfers, Safaricom has decided to suspend its earlier pricing for the service.
This announcement comes after Equity Bank accused Safaricom of hiking transfer fees between Equitel (owned by Equity Bank) and M-Pesa, which the Bank claimed discouraged users from transferring money between the two entities.
Equity Bank then wrote to the Central Bank of Kenya stating their dissatisfaction with the rates and said it was "not only a discouragement to the adoption of viable alternatives, but also a threat to 'the deepening financial inclusion' in the country."
Transfer amounts of between Kshs 20,000 and Kshs 35,000 incurred a Kshs 148 fee, compared to the previous amount of Kshs 60.5. This did not give Equitel the competitive advantage.
Safaricom has now announced the introduction of new rates for bank to M-Pesa transactions.
The new rates will take effect from 1 December 2015, and will see M-Pesa customers pay more for their bank to M-Pesa transaction.
It is expected that from 1st December 2015, customers transferring cash from any bank account to third party M-Pesa accounts will incur additional costs for amounts exceeding Ksh1, 500.
Safaricom has, for example, upped charges by 266.6% to Kshs 121, up from Kshs 33 for those transferring Kshs 35, 000. Those moving Kshs 70, 000 from their bank accounts to M-Pesa will incur additional Kshs 77, which represents a 233.3% increase.
Rita Okuthe, Safaricom's director of enterprise unit, has stated, "We are cognisant of the fact that we had implemented the new tariff for banks utilising the 'Additional Feature' (meaning the transfer of money from a bank account to third-party M-Pesa customer) and shall revert back to the previous tariffs effective 25th August 2015. The tariffs in force prior to 1st August 2015 shall continue to apply until 30 November 2015."
Safaricom, however, distanced itself from transactions between banks and third party M-Pesa customers and claimed this was a move initiated by banking institutions.