AIRTEL AND TELKOM USERS BLOCKED FROM USING MPESA

Airtel and Telkom users will not access Safaricom’s  pay-bill platform after Friday’s launch of seamless transfer of money through merchants attached to different operators.

The interoperability system will allow Airtel and Telkom Kenya subscribers to pay for goods and services through Safaricom’s till number.

But their access to Safaricom’s pay-bill will be delayed until next year, said an executive in one of the telecoms firms, in shifts aimed at curbing the dominance of Lipa na M-Pesa.

The Communications Authority of Kenya (CA) and the Central Bank of Kenya (CBK) will Friday launch the interoperability — the ability of different IT systems to communicate and exchange data —of the two rival networks for merchant payments.

“This is the first phase of this regulator-led initiative and it will allow Kenyans to make mobile money payments directly to an M-Pesa till number from any network,” said a telecommunications official who sought anonymity ahead of Friday’s launch.

“Interoperability will offer a faster, more affordable, secure, and convenient alternative to cash payments and also eliminate the hassle of transferring money across networks before making payments.”

Through interoperability, the CBK has been pushing to replicate the linkage between Airtel Money and M-Pesa that was introduced four years ago.

Users can send money across mobile phone networks, meaning that cash can be sent from M-Pesa and it reflects in an Airtel Money wallet.

From 2024, mobile phone users will be able to deposit and withdraw cash from any agent irrespective of the network they are on.

This will be akin to what happens with card payments where merchants use a single gadget that serves multiple banks.

Regulators led by the CBK have been fronting for a seamless transfer to curb the dominance of Safaricom’s mobile money service and Lipa na M-Pesa, which handled payments worth Sh970.2 billion in the year to January.

Airtel’s version of merchant payments services, dubbed Lipa na Airtel Money, is used much less compared to Safaricom’s, a market position that is in line with its stake in the mobile money transfer service.

There are no customer charges for payments made using Lipa na M-Pesa Buy Goods segment except for settlements made at fuel stations.

Business owners are charged a maximum of 0.5 percent or not more than Sh200 per transaction for money collected on the till, says Safaricom on its websites.

The CBK said the increased use of mobile money at agents and merchants through platforms like Lipa na M-Pesa had been constrained by lack of interconnection among the telecommunications operators.

More than 30 million people in Kenya use M-Pesa, which also allows users to send cash and make payments by phone, save and borrow. Safaricom had 258,000 mobile money agents at the end of September, leaving rivals to control the remaining 31,255 outlets.

Cashless transactions

This dominance plays out in the merchant payment segment.

Safaricom’s Lipa na M-Pesa merchants grew by 72.8 percent to 387,000 in the review period, highlighting the impact of increased preference for cashless transactions.

Its till and pay-bill service has risen to take an 85.8 percent market share of non-cash payment for ordinary goods and services, underlining the entrenchment of the mobile money platform in everyday transactions.

Lipa na M-Pesa was launched in June 2013 and has aggressively recruited merchants across the country, including large and small businesses such as fuel stations, supermarkets, corner shops and eateries.

This has seen it overtake the card payments — run by banks and their global payments technology partners such as Visa and Mastercard — that have largely focused on serving formal retailers.

Merchants signed up for Lipa na M-Pesa are charged a fee of up to 0.5 percent of the value of the transaction and customers may also incur the same level of fees to use the service.

Sourced from Business Daily