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Safaricom goes after payment cards, targets SMEs with "Lipa na M-Pesa"

Dennis Mbuvi | June 25, 2013
Safaricom on Monday hosted the press and a section of their enterprise clients to the relaunch of M-Pesa payment solution, dubbed "Lipa na M-Pesa".

With Lipa na M-pesa, Safaricom is doing away with the fee it was charging users for paying bills. Instead, merchants will be charged a 1.5 percent  fee per transaction, which Collymore points out is less than the 3 to 5 percent businesses are charged for processing credit and debit cards.

Additionally, Betty Mwangi, Safaricom's General Manager Financial Business Services says the firm is looking to recruit 100,000 businesses by April 2014, at the rate of 1000 per week. Small and medium enterprises, including salons, bars restaurants, butcheries, spare part shops, kiosks, public transport operators and other merchants in the jua kali(informal) sector are all being targeted. Safaricom will join four other aggregators, including KopoKopo, which has mostly been recruiting restaurants, in recruiting these businesses. The mobile operator is looking at using over 65,000 M-Pesa agents to recruit small businesses countrywide.

In addition, the process has been simplified to target Kenya's predominantly informal sector, while keeping in line with "know your customer" requirements. In addition to a form that can be downloaded from Safaricom's website, business will need a Personal Identification Number, the business owners National ID and a trading license to sign up for the service.

Already, 1,600 businesses have been accepting M-Pesa through the Pay Bill utility.

Collymore says that M-Pesa's new bill payment feature is competing with cash, rather than banks. That will be hard to swallow for banks. Equity Bank is in the process of rolling out near field contact (NFC) enabled cards and points of sale targeting SMEs and has rolled out a public transport payment card in partnership with Google. The bank's CEO, James Mwangi, has been openly against Safaricom's venturing into what he sees as bank's business.

Barclays Bank executives have also pointed out at the unfair playing ground that pits them against an unregulated service and in addition, warned of the risks of such a large service as M-Pesa being unregulated.

With the huge success of M-Pesa, the banks have had no option other than to partner with service, despite being portrayed as willing partners.

The government shows no signs of regulating M-Pesa, rather being more keen in taxing the more than 2 million transactions done on the service daily.

 

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