Kenyan mobile financing and money transfer service M-Pesa is slashing fees in an effort to compete against oncoming competition.
The competition comes in the form of Equity Bank, which received a mobile virtual network operator license earlier this year, and is preparing to launch a similar service very soon.
M-Pesa was developed by international telecommunication firm Vodafone to be used as a “Branchless Banking” tool for emerging markets like Kenya. The service was made available in 2007 through African subsidiaries Safaricom and Vodacom, and gained widespread recognition. M-Pesa now has an impressive 19.3 million users transferring funds, and paying for services through mobile devices.
To prepare for the competition, M-Pesa and Safaricom have lowered fees associated to money transfers by 67%, for transfer amounts of 10-1500 shillings.
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“It is our belief that by lowering the cost of these transactions we will provide an increased number of Kenyans with affordable access to basic financial services,” Bob Collymore, CEO, Safaricom.
While Equity Bank is not a mobile provider or operator, their solution is fit to work on virtually any device whether the user is a Safaricom/ Vodacom user or not. The payment feature comes in the form of paper-thin SIM cards that can be stuck to an existing SIM card to enable the payment service.