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Safaricom gets vendor to run higher capacity M-Pesa platform in Kenya

Posted In Business, Mobile, Technology - By admin on Monday, February 11th, 2013 With No Comments »

mpesaMobile phone services company, Safaricom, is finalising on the details of a contract to replace its current mobile money transfer platform in a move that is expected to reduce system outages and improve transaction speed.

In an interview with the Nation on Monday, the firm’s chief executive officer Bob Collymore said the company has now identified a vendor to provide the new M-Pesa platform that will be hosted locally.

With a customer base of over 15 million subscribers, M-Pesa records over 270 transactions per second which, according to Mr Collymore, is way higher than the capacity of the current platform.

“We have identified the vendor and are in final negotiations on commercial terms as well as specifications before placing contracts,” said Mr Collymore.

The new platform, to be complete in less than two years, will be owned and managed by the company locally and will have a higher capacity than the current system.

Currently M-Pesa is hosted and managed in Germany by Vodafone Group Plc, the biggest shareholder in Safaricom with a 40 per cent stake, which levies between 10 per cent and 25 per cent of M-Pesa revenues in royalties.

In the new arrangement, Safaricom will only pay royalty for using Vodafone’s intellectual property under a yet to be negotiated rate.

Kenyan telecoms have been increasing focus on mobile money and data as the next revenue streams in the wake of falling returns on the voice service segment.

The fight for the fast growing mobile money transfer sector went a notch higher last year with both Safaricom and Airtel launching a credit service though their respective brands; M-Pesa and Airtel Money.

But the players have expressed fears that the government’s move to impose a 10 per cent excise duty on all mobile money transaction fees could curtail the sector’s growth.

Last week, Safaricom increased fees on all M-Pesa transactions exceeding Sh100 by 10 per cent.

However, Mr Collymore said that users of M-Shwari, the new savings and credit service offered on the M-Pesa platform, would remain exempt from any increases in transaction fees in the meantime.-Nation

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