Safaricom targets diaspora cash in deal with US firm
Safaricom is set to sign a partnership deal with a US-based online payments and cash remittances company that could see it earn lucrative commissions from the multi-billion shilling remittances sent home every year by Kenyans in the diaspora.
The deal enables sending of cash from abroad directly into an M-Pesa account, a feat that Safaricom has targeted to achieve for years but has been delayed by concerns over stringent international regulations against money laundering and financing of terrorism.
The US company, Skrill, has capacity to handle online payments and cash remittances in 41 currencies while also supporting credit and debit card transactions.
“All you need to send money is the receiver’s full name and an M-Pesa mobile phone number. The money is then instantly deposited directly into their activated mobile wallet and they receive an SMS,” says the US firm on its webpage, which also features the M-Pesa logo.
Skrill rebranded late last year from its former trade name Moneybookers, a platform commonly used by Kenyans to receive online payments by companies abroad to do various jobs such as research work, graphic design and transcribing.
Safaricom director for corporate affairs Nzioka Waita said the firm had not yet signed a final partnership deal with Skrill, an indication that the deal could still be under the negotiation and testing stages. “We have not ruled out working with them in the near future,” said Mr Waita.
Diaspora remittances last year rose by 10.2 per cent to Sh111 billion ($1.3 billion), attracting the interest of money transfer companies targeting transaction fees from the transfers.
Remittances from Kenyans working abroad are the fourth-largest source of foreign exchange after revenue from tea, horticulture and tourism.
The United States and Europe, where Skrill has a strong presence, are the main source of cash sent home by Kenyans in the diaspora.
Last year more than 75 per cent of total remittances originated from North America and Europe.
The US firm charges a remittance fee of one per cent of the money being sent with a cap at Sh1,160 (10 Euros). The platform is also used for online shopping.-nation.co.ke