Payment News

M-Pesa Payment Limits Increased

Safaricom has increased both the account and daily transaction limits on its M-Pesa mobile money service from KSh 300,000 to KSh 500,000, approximately $3,477. The limit for an individual transaction remains at Ksh 150,000. These changes, approved by the central bank, are intended to help businesses as the share of cashless transactions rise.

Safaricom has worked with the Central Bank of Kenya to strengthen M-Pesa’s adherence to Know Your Customer, Anti-Money Laundering and other financial regulations and safeguards.

About 606,000 business receive payments through Lipa Na M-Pesa, a cashless payment service that enables customers from any mobile network to make transactions to any Lipa Na M-PESA Buy Goods till.

Separately, Kenya’s Court of Appeal has lifted the suspension on the Finance Act, 2023. The Act changed excise duty on goods and services.

While excise duty on SMS, calls and Home Fibre was reduced from 20% to 15%, at the same time the duty on fees charged on mobile money transfer services rose from 12% to 15%. The Act also requires digital content creators to pay a 5% withholding tax.

In response, Safaricom has announced increases in transaction charges of between 12% to 15%.

Digital Payments Surge in Oman

The government of Oman is encouraging a digital transformation, including in payments. Online retail transactions increased by 37.8% in 2022 and the number and value of mobile payment usage grew by 551% and 385% respectively. The volume of e-payment transactions grew by 39.4% with point of sale transactions growing 50.2%. E-commerce rose by 35.5%.

ATM transactions also grew, but, at 8.75%, at a rather lower level.

MAS to Invest in Fintechs

The Monetary Authority of Singapore has a track record of investing in financial sector technology and innovation in support of its goal that Singapore becomes a leading financial centre. It has just announced that over the next three years it will spend $150 million supporting work in three areas:

Supporting corporate venture capital entities that are helping fintech startups to develop viable business models (up to $2 million)
Grants to help scale emerging technology projects such as Web 3.0
Supporting projects that address Environment, Social and Governance data, reporting and analytics, with funding of up to $0.5 million per project.

Previous programmes have been instrumental in supporting development of the Singapore Financial Data Exchange, a cross-border payment linkage with Thailand, and initiatives to promote responsible AI, and sustainable finance.

Dutch Debit System Outage Puts Pressure on ATMs

In early August the debit card payment system in stores experienced an outage with many payments failing to process. The Dutch Payment Association reported a problem in the transaction processor.

This outage also affected withdrawals from Geldmaat ATMs. Given that the Geldmaat ATM system uses an entirely different system, it was unclear why this was affected. The spokesperson from the Dutch Payment Association suggested that this may have been caused by how many people tried to use the ATMs as a response to the debit card system failure.

MercadoLibre Targets Mexico to Drive Digital Payments

MercadoLibre is a Latin American eCommerce platform that is enjoying significant success. It main markets are Brazil and Mexico. Mexico has just overtaken Argentina.

MercadoLibre regards Mexico as having significant potential for growth given that is has a highly underbanked and cash-heavy economy. It has launched a credit card as part of its strategy to drive digital payments adoption among consumers and merchants in the country and expanded its insurance solutions.

In the second quarter of 2023 MercadoLibre reported record growth, driven by both increased sales and cost efficiencies. Net revenue grew by 57.2% to $3.4 billion and income from operations reached £558 million, a new quarterly record. Its annual active customer base has surpassed 108 million accounts, with 8 million new active users joining the platform in the second quarter.

UPI Ambitions in International Markets

National Payments Corporation of India (NPCI) wants to take its Unified Payments Interface (UPI) global using its NPCI International Payments Limited subsidiary. Prime Minister Modi is an active salesman for NPCI and, when in France recently, announced that France had agree for UPI to be used for retail payments. Singapore, the United Arab Emirates, Sri Lanka and Bahrain already allow UPI to be used. NPCI are in discussion with Thailand, the UK and the US.

NPCI has seen UPI start to displace cash in India for domestic payments and is eyeing up the remittance market. It faces some challenges:

Improving traceability and accountability to ensure customer data security. UPI will need a connector to work with other systems because it uses different technology, messaging protocols, and standards are different from most other faster payment systems.
For cross-border payments, UP will need to have competitive exchange conversion rates and mark-up fees.
In target countries with advanced economies, card penetration is high, and people are not used to paying with QR codes. It will take work to persuade merchants and consumers to change over.
Similarly, where cards are the primary mode of payment, incumbents such as MasterCard, Visa and banks will resist UPI. NCPI can expect intense lobbying in those countries where this is normal, such as the US.

One advantage NPCI does have is that if other countries want access to the Indian market, they may well have to accept UPI payments.

Alipay+ Extends Reach in Thailand

Ant Group is extending its reach with Alipay+ into Thailand. It is partnering with the Central Retail Corporation to allow international digital payments for Asian tourists from the Chinese mainland, Hong Kong, Malaysia and South Korea. The Central Retail Group has 3,000 retail outlets in Thailand.

There were more than 12.46 million international tourists visiting Thailand in the first half of 2023, with the top five source countries being Malaysia, China, Russia, South Korea, and India.