- Safaricom partnered with Visa Kenya to launch the virtual visa card, which is accessible to over 30 million M-Pesa users
- The card enables payments across 61 visa markets, charging Sh 121.92 to the dollar, a lower rate compared to commercial banks
- Safaricom chief executive officer (CEO) Peter Ndegwa said the card would enable its customers to make payments across the world without worry
- Besides Kenya, the service has been rolled out in Tanzania, while Mozambique, Congo, Lesotho and Ghana are target markets
Safaricom’s virtual visa card has stormed the foreign exchange market with lower rates threatening established Kenyan banks.
The giant telco partnered with Visa Kenya to launch the virtual visa card, which is accessible to over 30 million M-Pesa users.
The card enables payments across 61 visa markets, charging Sh 121.92 to the dollar, a lower rate compared to commercial banks.
With the lower charges, the telecommunications company could eat into the market share that banks have dominated for years.
Business Daily reports that banks charge between Sh 125 to 128 per dollar.
ABSA Bank charges the lowest at Sh 125, followed by Standard Chartered (Sh 125.37), Equity (Sh 126), NCBA Group (Sh 126.80), Cooperative Bank (Sh 127.95), Diamond Trust Bank (Sh 128), and Kenya Commercial Bank Group (Sh 128.10).
A user of the M-Pesa virtual card, therefore, saves between Sh 3.08 and Sh 6.18 more than the lenders.
During the launch, Safaricom’s chief executive officer (CEO) Peter Ndegwa said the card would enable its customers to make payments across the world without worry.
By partnering with Visa to provide the M-Pesa GlobalPay Visa virtual card, we are looking to bridge the gap for our customers who would like to use M-Pesa anywhere across the world.”
M-Pesa Africa managing director Sitoyo Lopokoiyit said partnering with Visa had enabled Kenya’s most profitable company to extend an affordable forex rate of 3.5 per cent, one of the lowest in the market.
“The M-Pesa virtual card seeks to further build on convenience by providing customers with an extremely affordable and secure way to make international online payments to millions of businesses such as Netflix, Google, Spotify, and many more directly from a customer’s balance,” Lopoloiyit said.
Kenyan lenders’ forex rate stands at between 4 per cent and 7 per cent on top of Visa’s exchange rate, which was quoted at Sh 118 as of Monday, July 4.
The virtual card enables users to pay over 100 million international merchants, including Alibaba and Amazon directly from their mobile phones.
Besides Kenya, the service has been rolled out in Tanzania, while Mozambique, Congo, Lesotho and Ghana are target markets.
The service saw Safaricom extend its services to over 200 countries globally. The card allows customers to transact Sh 150,000 to Sh 300,000 daily.
Corine Mbiaketcha, the Visa general manager for East Africa said its partnership with Safaricom was a milestone as it seeks to expand payment services across the continent.
“Visa is committed to expanding the payments ecosystem across Africa by opening up the global marketplace for every single consumer. This partnership with Safaricom is an important step in helping to achieve this,” Mbiaketcha stated.
