M-Pesa virtual Visa card is undercutting Kenya’s commercial banks with lower foreign exchange rates in the race to get a larger share of the country’s cross-border payments market.
The virtual card, which is initially available to more than 30 million M-Pesa users in Kenya, is charging Sh121.92 to the dollar for payments across Visa’s 61 million merchants.
Bank users will require more shillings while using their Visa cards for dollar-based payment, a signal that Safaricom is banking on pricing to gain market share in a business segment that has been dominated by the lenders.
Foreign currency payments through the KCB Group debit card are based on Sh128.10 against the dollar, DTB Group (Sh128), Cooperative Bank (Sh127.95), NCBA Group (Sh126.80), Equity (Sh126), Standard Chartered (Sh125.37) and Sh125 for Absa.
M-Pesa overtook voice to become the biggest revenue earner for Safaricom, underlining the growth of the financial service.
Mobile money service revenue jumped to Sh107.7 billion supported by the return to charging of transactions below Sh1,000 and improved business activity, beating voice as the firm’s top earner.
The financial service now accounts for 38.3 percent of total revenue of Sh281 billion, ahead of voice’s contribution at 31.2 percent in the review period.
Safaricom has made applications to offer additional services on M-Pesa such as investments and insurance whose rollout awaits regulatory approval.
Merchant payments through M-Pesa have grown, especially during Covid-19 as consumers increasingly make cashless transactions to avoid contracting the highly infectious virus.