Safaricom, a pioneering force in Kenya’s telecommunications and financial sectors, has received a green light from the Central Bank of Kenya to usher in a new era of M-PESA capabilities. Starting August 15, 2023, M-PESA users can revel in expanded account and daily transaction limits of KSh. 500,000. This strategic move is projected to energize businesses and escalate the adoption of digital financial solutions across the country.

“We extend our gratitude to the Central Bank of Kenya for their continued guidance, instrumental in shaping M-PESA’s adherence to critical financial regulations and safeguards,” affirmed Safaricom’s CEO, Peter Ndegwa. “The enhanced account limits will not only provide our customers with heightened convenience but will also amplify opportunities for small businesses as the trend toward cashless transactions gains momentum.”

This decisive step isn’t Safaricom’s first in the realm of advancing financial empowerment. Previously, in March 2020, the Central Bank of Kenya had sanctioned an increase in daily transaction and account limits to KSh. 300,000, fortifying the groundwork for M-PESA’s ongoing transformation. Now, with the bar raised once again, M-PESA users can transact up to KSh. 500,000 daily, with individual transactions capped at KSh. 150,000. This evolution of financial flexibility beckons users to explore the widened horizon.

A Thriving Environment for Enterprises

For businesses, particularly Small and Medium Enterprises (SMEs), this development heralds a new era of prosperity. Kenya’s steady progression toward a cashless economy finds its ally in this move, with cashless transactions surging to the forefront. The past financial year showcased the potency of M-PESA, as over 606,000 businesses harnessed Lipa Na M-PESA to facilitate transactions worth an astounding KSh. 1.625 trillion within just 12 months.

Beyond its direct impact on commerce, Safaricom’s strategic maneuver intensifies the competitive dynamics in the digital payment arena. As the daily transaction limit triples, M-PESA emerges as a credible challenger to traditional banking institutions, who themselves are accelerating their digital transformation efforts.

Evolving Confidence: Central Bank’s Stance

The Central Bank of Kenya’s endorsement serves as an acknowledgment of M-PESA’s robust security mechanisms and stringent anti-money laundering safeguards. While concerns surrounding money laundering were present in the past, the Central Bank’s repeated approval underscores its growing confidence in the platform’s resilience and adherence to compliance measures.

M-PESA’s evolution into an e-commerce enabler indicates the dynamic path ahead. Safaricom’s readiness to compete with financial institutions in the fintech landscape positions M-PESA as a formidable player.

The repercussions extend beyond finance, shaping Kenya’s progression towards a cashless society, further accelerated by the challenges posed by the COVID-19 pandemic. Mobile money transactions are integral to Kenya’s economic fabric, representing over half of the GDP, a testament to its ubiquity and transformative potential.

Safaricom’s strategic acumen and commitment to regulatory excellence paint a promising outlook. The expanded transaction limits will undoubtedly foster financial inclusion, empower entrepreneurial endeavors, and cement M-PESA’s global stature as a beacon of innovation in mobile money. This landmark development bridges aspirations with reality, propelling Kenya toward a future underpinned by digital financial prowess.

By: Montel Kamau
Serrari Financial Analyst
15th August, 2023

photo source Google