Safaricom Publishes New Mpesa Tariffs: Was that a decrease? Or an increase?

Yesterday, Safaricom announced that it will be decreasing it’s Mpesa tariffs. Good, we all thought. Equity’s pending entry into the mobile payments market is finally going to make things competitive. The new rates published by Safaricom today though give a somewhat conflicting picture.
There are reductions in the lower bands, coupled with increases in higher bands. The transfer fee for the voluminous KES 501 to KES 1000 band has been slashed by 44% to KES 15 from KES 27. The popular KES 1001 to KES 1500 band has also had its transfer fee reduced by 24.2% from KES 33 to KES 25. The largest tariff cut is in the minimal KES 10 to KES 49 band. Sending money in this band will now cost KES 1 down from KES 3, a 66.6% reduction.
Those sending money in higher bands though, will have to part with more starting tomorrow. Transfer fees for the KES 1501 to KES 2500 band for instance have been hiked by 21.2% from KES 33 to KES 40. Those sending amounts between KES 2501 to KES 3500 though will have to part with KES 55, up from KES 33, a 66.6% increase. The largest price hike has been reserved for the KES 3501 to KES 5000 band. Sending money in this band will now cost you KES 60, up from KES 33, an 81% increase.

Safaricom had earlier indicated that it would not be reacting to Equity’s entry into the mobile money transfer market with price cuts. The firm’s CEO Bob Collymore rather smugly pointed out that transfer fee price cuts by Airtel on it’s Airtel Money service had had little effect on its mammoth market share. Safaricom, however, seems to have since recognized Equity Bank for the formidable competitor bank is. The Communication Authority’s recent directive that Safaricom open up its agent network must have weighed on its pricing decision too.
The new rates go into effect tomorrow Thursday, 21st August 2014. Withdrawal commissions remained unchanged.

Transaction Range MinimumTranscation Range MaximumNew Rate: Transfer to Other M-Pesa UsersOld Rate: Transfer to Other M-Pesa UsersTransfer to Unregistered UsersWithdrawal from MPesa Agent104931N/AN/A5010053N/A10101500271166275011000153366271001150025336627150125004033662725013500553388493501500060331056650017500755514382750110000855517111010001150009555220159150012000010055237176200012500011082275187250013000011082275187300013500011082275187350014000011082N/A275400014500011082N/A2754500150000110110N/A2755000170000110110N/A330