M-PESA, Safaricom’s flagship mobile money platform, has witnessed a fourfold increase in usage over the last five years, a growth largely attributed to strategic pricing changes introduced during and after the Covid-19 pandemic.
Reflecting on his five-year tenure at the helm of Safaricom, CEO Dr Peter Ndegwa highlighted how the zero-rating of select transactions during the pandemic played a pivotal role in transforming user behavior and expanding the platform’s reach.
In response to a directive by the Central Bank of Kenya at the height of the pandemic, Safaricom scrapped charges on transactions below Sh1,000 and transfers between bank accounts and mobile wallets. The measure was designed to encourage cashless payments and reduce physical contact amid efforts to curb the spread of the coronavirus.
“When we came back to charging,” Dr Ndegwa noted, “we significantly reset the pricing of those transactions and reduced price by an average of 50 per cent.”
The company went a step further by permanently waiving charges on person-to-person transfers of Sh100 and below, and on payments to merchants for amounts of Sh200 or less — typically used by customers at kiosks, small vendors, or for short matatu and bodaboda rides.
As a result, non-chargeable transactions now make up 58 per cent of M-PESA’s transaction volume. However, despite offering many services for free, the number of chargeable transactions per user has tripled.
“Those who are now transacting with M-PESA are using it three, four times more than they were before,” Dr Ndegwa added.
Last year, M-PESA contributed 44 per cent of Safaricom’s total revenue, underlining its critical role in the company’s growth strategy and Kenya’s broader digital economy.
Watch the full video below to explore the transformation of M-PESA and the strategy behind its success: