It’s doubtful Safaricom will lose that much in MPESA Revenues
Earlier today the Central Bank of Kenya issued a report showing how high valued mobile money transactions have dwindled since the start of the 90 days in which the telcos agreed to waiver all charges for money transfers below shs 1000. Given that Safaricom controls 99.9% of the mobile money market, we will assume that the figures released apply only to Safaricom.
According to the CBK report, high valued money transfers for amounts above shs 1000 dropped to a daily average of shs 5.57 billion between April 20 and May 20, compared to a the normal daily average rate of shs 6.83 billion that Safaricom had recorded prior to March 16th. By transfer volume therefore, Safaricom seems to have lost a daily average of shs 1.26 billion, a loss that translate to shs shs 90.72 by volume of transactions for the period between March 16th and May 27th.
That’s not the whole story though. There was a significant increase for the waivesaread transactions, those that fall below the shs 1000 threshold. Taking advantage f the waiver, Kenyans increased their daily transfers for the waivered transactions from shs 1.08 billion daily average to shs 1.98 billion daily average, bridging the deficit caused by dropped high value transactions to a paltry shs 370 million daily average, which levels the loss in transaction volume from shs 90.72 billion worked out up there to a lower shs. 26.64 billion. This then implies, if the percentage of revenue (3%) from transaction volume reported by Safaricom last financial year is to go by, then Safaricom has lost only shs 863 million over the period in question. Safaricom however said in April that the revenue it will have forgone by the end of the 90-day period as agreed with the government to waiver transaction charges will be shs 5.5 billion. The 90 days will end in early June.
These reports are doubtful because they do not account for increased C2B transactions that Safaricom must have experienced during this time. As we all know, the agreement by the government was meant to allow Kenyans to desist from handling cash, so that they can make direct payments to Pay Bill and Buy Goods numbers – and this increase in C2B transactions must have significantly countered the drop in revenue Safaricom must have experienced up until now.