Safaricom withdraws new charges on Equitel

Customers making banking transactions on the M-Pesa platform will be charged a flat Sh33 after Safaricom formally rescinded an earlier decision to increase charges for money sent to third party M-Pesa account holders.

On August 1, Safaricom effected tariff changes for third-party transactions for Equity Bank’s mobile service, Equitel, which increased on a graduated scale from Sh22 for amounts falling between Sh50 and Sh1,000 and Sh75 for customers sending Sh5,001 to Sh7,500.

Those transacting amounts between Sh20,001 and Sh70,000 were charged a high of Sh110. This means the rates revert to the previous tariffs before the August 1 change.

“We are cognisant of the fact that we had implemented the new tariff for banks utilising the ‘additional feature’—meaning the transfer of money from a bank account to third-party M-Pesa customer—and shall revert back to the previous tariffs effective August 25, 2015.

The tariffs in force prior to August 1 shall continue to apply until November 30, 2015,” wrote Rita Okuthe, Safaricom director of Enterprise Unit in a letter dated August 25. Safaricom said the revised charges will apply to all financial institutions.

The move seems to be a reaction to pressure by Equity Bank, which had demanded an explanation from the telecommunications company and Central Bank Governor Patrick Njoroge about the increased rates without giving customers a three-month notice on the change.

“We strongly believe that financial inclusion gains made so far are at risk of being reversed and your intervention is necessary to ensure transparency and fairness,” Equity Bank chief executive James Mwangi wrote in a letter to the CBK governor.

At the same time, Equity confirmed that money transfer from one mobile phone or bank account to another within the Equity ecosystem still attracts zero charges. Equitel subscribers sending money to another mobile network are charged one per cent of the transaction amount up to a maximum of Sh25.

After making the hasty retreat, Safaricom also distanced itself from the introduction of the transfer of money from customers’ bank accounts to third-party M-Pesa wallets, claiming this was actually an ‘additional feature’ by the bank.

“Safaricom introduced the bank-to-M-pesa functionality primarily to enable customers access their bank accounts from their mobile phone.

However, some financial institutions later introduced a new transaction arrangement that enabled their customers to send money from their bank accounts to the M-Pesa accounts of third parties (the “additional feature”),” wrote Okuthe.

SOURCE:MEDIAMAXNETWORK