Safaricom has been keen to grow M-Pesa into more than just a mobile money transfer service and in turn growing into a tool for financial inclusion. This saw Safaricom launch Lipa NA M-Pesa merchant service that allows individuals to pay for goods while at the same time, businesses can accept these payments.
Other moves have involved the launch of services such as M-Shwari and KCB M-Pesa account which not only allow individuals to save but to also access financial services on their mobile phones.
One of the barriers towards achieving this goal has been charges for transaction charges meted against small transactions. For instance, sending and withdrawal costs for transactions below 100/= were charged 10/=. For the common M-Pesa user, these charges may have an impact on their financial plans. To this end, Safaricom has announced the scrapping of M-Pesa charges for all transactions below 100/=. Safaricom says these transactions were worth 500 Million a year, an amount they have chosen to forego.
The same will apply to Lipa na M-Pesa merchant service. Dubbed M-Pesa kadogo, the service will target the lower tier M-Pesa users from owners of grocery stores to Boda Boda operators who transact these amounts. Safaricom is wary that some users may attempt to send large amounts of money by limiting each transaction at 100/= and then take advantage of this service.
To this end, Safaricom says they will cap the number of transactions one can perform using this window. Safaricom, however, did not specify how many transactions one can perform for a specific duration, or what metric this will play by.
The announcement of M-Pesa Kadogo comes at a time when the telco is working towards the rolling out of the Lipa Na M-Pesa card. The Lipa Na M-Pesa card will mirror an individual’s M-Pesa balance meaning whatever amounts are in your M-Pesa wallet are reflected in the card. The card is NFC enabled where a user can Tap and Go at the point of checkout when making purchases for goods and services. The plan for the telco is to provide merchants with point-of-sale terminals which are NFC enabled, where users can complete these transactions.