A subtle shift is happening in Kenya as many small traders quit Safaricom’s Lipa Na M-Pesa Buy-Goods payment option spooked by multiple charges on the services, which eat into their incomes.
The Lipa na M-pesa service which attracts a single charge has grown a lot as businesses try to accommodate the growing number of customers paying using mobile phones, while at the same cutting costs they incur for transactions.
Small outlets selling a wide range of products, revealed that many traders have opted out of the ‘Buy Goods’ service after counting the losses their enterprises make when customers pay through the platform.
“After making calculations, I realised I was losing about Ksh417 daily due to the deductions, which sum up to over Ksh12,000 monthly. I could not afford that since it was affecting the business’ incomes,” a trader in Nairobi told Smart Business. The trader says Safaricom has been charging them when a customer makes a payment by deducting 0.25% for any transaction above Ksh200, which small businesses decry to be too much.
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Many other traders have left the service due to what they call high charges by the telco company.
Safaricom charges businesses 0.25% of payments made through the Buy Goods service, with businesses deducted Ksh2.5 for any transaction worth Ksh1,000 and Ksh3.82 for a transaction worth Ksh1,500.
When Safaricom released the half-year result on Friday last week, the telco’s CEO, Peter Ndegwa, said the company had not reviewed pricing for its business customers but said there were plans to lower prices for both types of customers. “The intention over time is to continue reviewing our pricing so that it is lower for both our business and consumer customers,” Ndegwa said.
Safaricom, however, on the Lipa Na M-Pesa Biashara Till Terms & Conditions, particularly on the service fees states that “The Service shall be subject to the charges and minimum/maximum transaction values appointed by Safaricom from time to time. Safaricom may by notice from time to time vary the charges and minimum/maximum transaction values.”
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