Safaricom, Kenya’s largest telecommunications company, will introduce fee reductions for M-Pesa, East Africa’s leading mobile currency product, to reduce the actual exchange of currency caused by the OUTBREAK of COVID-19,media reported. The company announced that all individual (P2P) transactions below 1,000 Kenyan shillings (about $10) would be free for the next 90 days.
According to a statement provided by Safaricom, Safaricom met with the country’s central bank and, on the instructions of Kenyan President Uhuru Kenyatta, “exploreways ways to deepen the use of mobile money to reduce the risk of spreading the virus through cash in kind.”
To encourage the use of digital payments rather than cash, East African Telecom will also allow small and medium-sized enterprises to increase their daily M-Pesa trading limit from 70,000 Kenyan shillings to 150,000 Kenyan shillings. These measures represent the Government’s ability to use digital finance as a means of influencing social distance and P2P transactions in an infectious health crisis.
M-Pesa has 20.5 million customers in a network of 176,000 agents, generating about a quarter ($531 million) of Safaricom’s annual revenue of about $2.2 billion in 2018. The company already has a mobile currency market share of nearly 75 per cent in Kenya, which has the highest mobile currency usage in Africa.
In some ways, putting all the output on one platform poses a systemic risk to Kenya’s economy. However, in the context of the global health pandemic, which is spread through human contact, the dominance of mobile currencies in the country provides a policy tool that encourages large-scale digital transactions through financial transactions.
Although there are currently only three new crown-confirmed cases in Kenya, the country is taking cautious measures, according to Worldometer. As a result of the virus, Uhuru cancelled two foreign meetings and the University of Nairobi began to close, and many companies in the country are encouraging employees to telecommute, according to local sources and media reports.