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Easy MPesa ride finally over for bank customers

by Atqnews
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IT WAS at the start billed as a value addition proposition for customers. To rivals, the M­Pesa money transfer service was bank customers retention tool by Kenya’s leading mobile network operator Safaricom. Developments over the past year, however, show the company has shed any pretensions that M­Pesa is anything but a commercial unitthat the company will increasingly leverage on to grow its revenues. Introduced eight years ago as a person to person transfer service, it evolved midstream into a payment service initially for utility bills and later for goods and services, including school fees. Its attraction soon drew banks, which thought they could ride on

it to reach their customers while obviating the high cost of brick and mortar outlets installation. Safaricom sat back in glee, signing partnerships with at least 30commercial banks and 160 other financial institutions including savings and credit societies. Through the partnerships and electronic interfaces on mobile phones, bankcustomers could send money tothird parties at a fraction of the graduated tariff bands, especially on the upper end of the scale.

The telco, realising it was losing money, went back to the drawing board and last week announced that transfers to third parties by banks from customers’ accounts via M­Pesa would be charged regular rates. It is now the bank’s turn to go back to the drawing board but one thing is clear: They will charge customers more for the transaction. Convenience does not come cheap. Not surprisingly, a Euromoney survey of analysts at leading banks, consultancy firms and research institutes around the world voted Safaricom as the best managed company in Kenya. While this was based on technical and financial aspects, its success could be evident in turning M­Pesa into a way of life.

 

Culled from The East African

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