The mobile-money service M-Pesa is finding itself in a price war. On Tuesday (Aug. 19), Vodafone subsidiary Safaricom said that it would slash its fees by as much as 67 percent, in anticipation of imminent price competition from a similar service coming from Equity Bank, the Wall Street Journal reported.
“Equity’s yet-to-be-launched service boasts lower transaction fees than M-Pesa. It plans to charge a 1 percent fee capped at 25 Kenyan shillings—about 20 U.S. cents. M-Pesa doesn’t cap charges and they can be more than 100 shillings on large transactions,” the Journal said. “Equity Bank’s rollout of its mobile-money product, planned for last month, has been stopped in its tracks by a complaint by Safaricom.”
Safaricom claims 19.3 million M-Pesa users and points out that many use the service for very small transactions. “The new tariffs will apply to transactions from 10 Kenyan shillings to 1,500 Kenyan shillings, which the company said make up 65 percent of all M-Pesa transactions,” the story said.