The zero-rating of some M-PESA transaction charges during the Covid-19 pandemic and the subsequent changes after resulted in usage of the platform growing fourfold over the last five years.

Reflecting on the five years he has been charge at Safaricom, Dr Peter Ndegwa explained the circumstances and the thinking that resulted in the growth of M-PESA, which last year contributed 44 per cent of the company’s revenue.

As Covid-19 raged, the Central Bank of Kenya asked mobile money providers to remove charges on transactions below KSh1,000 and on transfers from bank accounts.

The move provided a relief for M-PESA subscribers at a time physical contact was discouraged to reduce the chances of spreading the new variant of coronavirus responsible for the latest deadly pandemic on the planet.

“When we came back to charging,” Dr Ndegwa recalled, “We significantly reset the pricing of those transactions and reduced price by an average of 50 per cent.”

Safaricom decided to maintain a cushion for low-value transactions by not charging for person-to-person transfers of KSh100 and below and payments to merchants for KSh200 and less.

These are typically payments for transactions at kiosks and small vendors and the average fare for a short hop on a bodaboda or a matatu ride.

The result was an increase in the volume of non-chargeable transactions to 58 per cent by the firm’s last financial year.

“Even if we have made many transactions free, the number of transactions that are chargeable per customer has tripled. So, we’ve made many transactions free but those who are now transacting with M-PESA are using three, four times what they were using,” said Dr Ndegwa.

Watch the video below to learn more about the reasons behind the increased usage of M-PESA.