Equitel has increased the fees it charges to transfer money from Equity Bank to M-Pesa, denying customers the cheaper services the bank promised earlier. Customers started seeing the new higher charges in early August after Equitel officially launched its thin SIM. Equitel initially charged Sh33 per transaction below Sh1,500. It is now charging Sh66.
Equity Bank Chief Executive Officer James Mwangi, however, said that “all Equity charges on mobile money remain Sh27, the addition is a fine by Safaricom. They have doubled their minimum charge to Sh66.”
The higher charges are likely to prompt Equitel customers to flee to more affordable money transfer options. Most customers on Equitel were attracted by the lower fees the bank charged for money transfers to other networks. The bank’s charges were even lower than what Safaricom charged for transfers within its own network.
Safaricom Corporate Affairs Director Stephen Chege, however, said the only charge that was doubled was for a new service, which had no set tariff.
“The increments affected over 10 banks that had opened up the new menu called cash sent without tariffs.”
A charge sheet from Safaricom seen by the Nation shows that the telco has cut its termination charges on mobile money to a minimum of Sh15.
Equitel, which rides on Airtel Kenya’s network, now turns out to be more expensive both on money transfers and cross-network calls.
When it entered the market on a pilot basis last year, Mr Mwangi promised “free money” transfers within its network and a Sh25 charge at most for transfers to other networks. It appears that Equitel has zero interest in consumer needs as its voice and Internet services are also way more expensive than those offered by the main telecommunication vendors.
The bank now charges for Equitel SIM cards that were initially given freely to customers through the bank’s over 225 branches. Equitel’s entry into the market is seen as a threat to Safaricom’s M-Pesa service, which currently has 19 million active users. Equitel, on the other hand, had gained over one million subscribers by early August.
However, the move to increase charges without notice could see customers flee the much touted thin-SIM platform.
“Equitel had 77 million transactions on its mobile money in June, transacting Sh42 billion, with a monthly growth rate of 93 per cent,” Mr Mwangi said.