Safaricom launches money transfer service to Tanzania
10 March 2015, 08:24
Nairobi - Safaricom on Monday launched money transfer service to Tanzania.
Safaricom CEO Bob Collymore said the mobile firm has partnered with Tanzanian mobile service operator Vodacom to enable seamless transactions between Kenya's nearly 20 million M-Pesa customers and Tanzania's 7 million M-Pesa customers.
"This is a new chapter in the continuing growth story of M-Pesa. Enabling transactions between Kenya and Tanzania will make more convenient for individuals to transact across borders and unleash the transformative power of a first of its kind cross-border payment system," Collymore said in a statement issued in Nairobi.
Kenya's 2014 mobile money use surged to a record 26.1 billion U. S. dollars, an increase of about 4 billion dollars from previous year.
This is a new high in the use of the technology that has transformed lives in the East African nation, boosted e-commerce and enhanced saving culture among Kenyans.
The 26.1 billion dollars annual use, which new data from Central Bank of Kenya show, means that Kenyans are transacting 72 million dollars a day on mobile money platforms, 3 million dollars per hour or 50,000 dollars a minute.
This is a rise from 61 million dollars a day, 2.6 million dollars an hour or 43,333 dollars a minute in 2013.
In January, Safaricom received a cash remittance operating licence from the Central Bank of Kenya (CBK), enabling the mobile firm to transfer money out of the country.
"With a substantial unbanked population transacting mainly in cash, the Tanzania-Kenya corridor represents a significant opportunity for M-Pesa to give people and companies an accessible, low-cost alternative to traditional international remittances," said Michael Joseph, the Vodafone Director of Mobile Money.
Joseph said the cost of transferring money internationally through traditional channels like banks or money transfer operators can be up to 31 percent of the transaction, depending on the service provider.
"The partnership will begin the journey for our over 7 Vodacom subscribers to send money to M-PESA subscribers and vice versa using the service and boost the volume of transactions and trade between the two countries," said Rene Meza, CEO, Vodacom Tanzania.
Also read: Safaricom launches M-PESA SurePay
With presence in 10 countries; Kenya, Tanzania, South Africa, Lesotho, DRC, Egypt, Mozambique, India, Romania, and Fiji, M-Pesa has emerged as the most compelling mobile-money proposition catering for both individual and corporate transactions.
Vodafone is estimated to have pocketed 19 million U.S. dollars of the 171 million dollar revenue that Safaricom generated from M- Pesa in the six months to September 2014 when the firm's net profits rose 30 per cent to 162 million dollars.
The firm has been earning royalties of between 10 per cent and 25 per cent from M-Pesa's annual revenues since Feb. 23, 2007.
Vodafone says that the new partnership between Safaricom and Vodacom Tanzania presents a significant opportunity for even further growth as large populations in the two countries are still unbanked.
"By comparison, using M-Pesa to transfer 50 dollars across the Tanzania-Kenya border would cost around 1 per cent of the transaction plus a foreign exchange fee," it said.
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