The other day, we learned that the courts had suspended a hearing on the Finance Act 2023. The bill suggests several things, including increased taxes and avenues for new collections, such as taxing crypto exchanges and earnings from digital creation.
The law, signed by President Ruto, wasn’t immediately implemented after its legality was questioned through a court filing. It also recommends a higher excise duty of 15% for mobile money transfers (up from 12%) but reduces the rates to 15% (down from 20%) for data, voice, and SMS services.
Safaricom has already implemented the changes. Customers are now paying more for M-PESA transfers but slightly less for other mobile money services mentioned.
Airtel Kenya has announced that its Airtel Money transfer fees will not change. However, it will still cut other mobile service rates as directed by the new law.
Telkom Kenya will likely do the same for calls, voice, and SMS. However, the third-largest telco in Kenya has not announced whether it will adjust its T-Kash rates.
It is worth noting that Safaricom makes a significant profit from M-PESA services and holds over 96% of the market share, leaving the rest of the pie shared between T-Kash and Airtel Money – which is under 4% and poses no significant rivalry to M-PESA.
The state and authorities, such as the CBK, have attempted to make the market fairer for all players. For instance, Buy Goods and Paybill numbers are now interoperable. However, the major issue here has always been access to agency networks, where M-PESA still leads the pack with over 300K shops.
Only the future can tell whether this resource will become interoperable, but for now, Airtel Money and T-Kash will continue to be in the shadow of M-PESA.
