Tariffs Key Focus As Safaricom Increases Equitel to Mpesa Transaction Charges

During the formal launch of the Equitel platform, one of the most memorable quotes from Equity Bank Group CEO Dr James Mwangi was: "'With Equitel, we are at last celebrating freedom, choice and control". The statement was followed by loud applause from the audience which included Equity staff, Airtel Kenya representatives and the media among others.

The audience may have celebrated because with Equitel, they could now make mobile money transfers more cheaply, have more choice as the entry of the new service meant an additional mobile transfer channel to choose from and ultimately freedom from the comparatively more expensive options previously available in the market.


But it now seems that having freedom, choice and control wasn't going to be that easy to get for the millions of customers using mbile money transfer services. Less than a month after the launch, Equity's Equitel customers are no longer celebrating as Safaricom has already moved to increase its charges for Equitel to MPesa transfers. Previously, Equitel clients were charged a uniform fee of Kshs 33 for transferring any amount to MPesa but in early August, Safaricom upwardly revised its tariffs for Equitel to MPesa transfers.

A letter titled: "Change of B2C tariff for Bank to MPesa Service" addressed to Eric Karobia, Equity Bank's GM for Innovations, Product Development and Mobile Payments, Safaricom states that the "changes have risen partly in light of ongoing efforts to streamline the MPesa proposition and also partly in response to continuous efforts to ensure compliance with regulatory guidelines."

The letter, dated July 9 and signed by Rita Okuthe, Safaricom's GM for Enterprise Business further states: "It has come to our attention that there has been an increase in the number of alleged incidents of erroneous and/or fraudulent transfers involving bank customers utlising the Bank to MPesa functionality offered by their various banking /financial service providers. The increase in the number of these incidents has been attributed o the fact that customers are enabled to make direct MPesa transfers to the MPesa accounts of third parties."


As an incentive, Safaricom introduced discounted tariffs for bank to MPesa transfers to customer's own MPesa accounts while increasing the tariffs for bank to MPesa accounts of third parties.

A comparision of the various mobile money transfer options following the revision of charges indicates that its now cheaper to move (any amount of) money from Equitel to Equitel or Equity account as this attracts no charge at all. It's however more costly to transact amounts exceeding Kshs 1,500 from Equitel to MPesa as this attracts a fee ranging from Kshs 65 to upto Ksh 135 charged for transacting Kshs 35,000. Equitel to Orange Money trasactions also attract no charge as an Orange Money account is mapped to an Equity Bank account while Equitel to Airtel Money transactions fee range from Kshs 31 (from amounts between Kshs 50 to 100) to Kshs 55 charged for transacting Kshs 35,000.

According to the latest statistics from the Communications Authority, the Equitel platform acquired a share of 1.9 per cent of the total mobile subscriptions by registering 665,661 mobile subscribers during the January-March 2015 period.

The MVNO also recorded on-net traffic of 2.3 million minutes during the quarter while the traffic to other mobile networks stood at 17.2 million. The number of mobile money transfer subscribers increased by 3.0 percent to reach 26.7 million up from 26.0 million recorded during the last quarter while the number of agents rose to 126,622 up from 121,924.