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Consumers lose out as Safaricom and Equity tariff wars intensify
A fresh storm is brewing between Kenya’s financial services giants, Safaricom and Equity Bank, over the rates being levied to consumers making transactions across the two service providers. The latest wars also puts to question the security of money sent across both platforms, with consumers paying the ultimate price.
The latest round of controversy comes as Equity accuses Safaricom of arbitrarily increasing the mobile money transfer rates charged to Equitel’s consumers transferring money to Safaricom’s M-Pesa service.
Consumers of Equitel last week took to social media after finding out that the rates for sending money to M-PESA had suddenly doubled without prior notice. They stated on twitter that the cost had risen on account of Safaricom increasing its termination rates stating that Equitel’s prices are capped at Sh27.50.
Previously, Equitel to M-Pesa transfers were charged a uniform Sh33 per transaction. This meant that Equitel to M-Pesa transfers were cheaper than M-Pesa to M-Pesa transfers for amounts above Ksh1,500. This made Equitel a more attractive proposition, just as it looked to gain market share, especially from M-Pesa, a new higher tariff rates are now in operation.
An enquiry by infotake, a technology company, to Equitel’s Customer Care says that the new fees were brought about by Safaricom’s increase in “termination fee” - the money Equitel pays Safaricom for money transacted to M-Pesa. Equity says it’s Equitel charges are capped at Ksh27.50, and that any extra fee here is being levied by Safaricom.
According to Equity Bank’s tariff schedule seen by The Standard, sending money between Equitel and M-Pesa valued at more than Sh1,500 are levied the highest rates compared to similar transactions between Airtel and Orange.
Sending Sh35,000 between Equitel and M-Pesa for example attracts Sh135 in mobile money transfer levy. The same amount of money sent to any bank account from Equitel costs consumers Sh55. Safaricom on its part states that the tariff revisions were effected from August 1, 2015 and had arisen on account of security and regulatory concerns.
“These changes have arisen partly in light of our ongoing efforts to streamline our M-Pesa proposition and also partly in response to our continuous efforts to ensure compliance with regulatory guidelines,” reads a letter sent to Equity by Safaricom dated July 9, 2015.
The letter signed by Safaricom’s General manager for enterprise business Rita Okuthe further shows increased fraud cases on transactions between banks and M-Pesa account. “It has come to our attention that there has been an increase in the number of alleged incidents of erroneous and fraudulent transfers involving bank customers utilising their accounts to transfer money to M-Pesa accounts,” the letter reads.
“The increase in cases have been attributed to the fact that customers are enabled to make direct M-Pesa transfers to third party accounts.”
Safaricom has further raised concerns over Equitel’s inability to verify transactions originating from its network to M-Pesa, which it claims has been the source of erroneous transactions. This, it says, has lead to complains and disputes that are complicated to settle.
SOURCE:STANDARD DIGITAL
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