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Safaricom CEO Bob Collymore with general manager, financial services Betty Mwangi-Thuo during the launch of Lipa na M-Pesa product in Nairobi in June. Credits. BusinessDailyAfrica |
East African Breweries (EABL) distributors can now make payments using Mpesa mobile money service. This has been enabled in a recent deal between East Africa’s largest alcohol beverage company and Kenya’s leading mobile network operator, Safaricom.
In a recent statement by Safaricom corporate affairs director Nzioka Waita to Business Daily Africa,
“The product is designed to have zero movement of physical cash, improve collection efficiency and minimise risks associated with cash within the distribution network.” EABL distributors will receive payments for stocks by pubs, restaurants and other retailers through M-Pesa.
“The telecom is also using the Pay Bill service to encourage cashless transactions for other fast-moving consumer goods. The recently launched Lipa na M-Pesa service currently has 36,749 merchants and management targets to have 100,000 merchants on board by the end of the current financial year,” says a coverage note on Safaricom done by Genghis Capital.
The stockbroker says that the potential for Safaricom to grow revenue, is enormous because the use of electronic payments is still low, accounting for three per cent of all transactions.
Traders are charged about five per cent to receive payments on debit and credit card transactions, giving Safaricom’s Lipa na M-Pesa an upper hand over commercial banks.
The telecoms giant has been pushing for an increase in the daily M-Pesa payment limit of Sh140,000 imposed by the Central Bank of Kenya to attract companies with higher value transactions.
Increase in M-Pesa revenues is expected to make up for slowing sales from voice, which has been and still accounts for the lion’s share of turnover.
The pact with EABL is one of several that Safaricom has lined up to sign with companies that have big distribution networks such as Unilever, Coca Cola, BAT and Nestle.
EABL recorded an annual turnover of Sh59 billion in the financial year ended June 2013, making the deal potentially lucrative for Safaricom, which is keen to generate more profits from M-Pesa by promoting its use as a cashless payments system besides being a money transfer platform.