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Safaricom targets Nakumatt, Tuskys for Lipa Na M-Pesa

Safaricom is set to sign up Tuskys and Nakumatt supermarkets as Lipa Na M-Pesa agents in a deal that brings two of Kenya’s biggest retail chains on the mobile phone based payment system.

The telecommunications firm says it is already conducting trial runs for the service at three Tuskys outlets and is also in talks with Nakumatt on the matter.

The telco has already signed up Naivas and listed retailer Uchumi, Kenya’s third and fourth biggest supermarket chains respectively, on the payments platform.

“We are in pilot stage with several branches of Tuskys supermarkets. We are also in the process of onboarding Nakumatt Supermarkets,” said Safaricom’s general manager in charge of financial services Betty Mwangi in an interview.

LUCRATIVE COMMISSION

The four retailers have a combined turnover that could easily add up to more than Sh100 billion, indicating the lucrative commission income that Safaricom is eyeing.

The ‘‘Lipa Na M-Pesa’’ service allows customers to pay for shopping via mobile money by sending cash to special till numbers allocated to merchants such as retail stores, fuel stations, pharmacies, hotels and airlines.

Safaricom charges retailers a one per cent transaction processing fee on the Lipa Na M-Pesa service, which is cheaper compared to the average three per cent levy banks charge merchants to use their points of sale (PoS).The commission rate could be negotiated on a case-by-case basis.

“There is still a great deal of scope for the growth for services of this kind (retail payments),” said Ms Mwangi.

Safaricom is enlisting merchants to accept M-Pesa payments as a strategy to cut reliance on peer-to-peer mobile transfers, which is high volume but low margins.

SWIPE CARDS

The company said it had identified 600 retail outlets that it plans to integrate into the Lipa Na M-Pesa service by March this year.

The deployment of ‘‘Lipa Na M-Pesa’’ at retail stores puts Safaricom in a head-to-head battle with commercial banks that have been pushing consumers to swipe their cards at the till.

Diamond Trust Bank and MasterCard have signed up Kenya’s biggest retailer by revenue to unveil the Nakumatt Global Pre-paid MasterCard.

Chase Bank has teamed up with Visa to launch the Naivas Reward Card, a pre-paid shopping card that also works as a loyalty card.

Tuskys confirmed that it has been testing the Lipa Na M-Pesa service for more than three months.