Safaricom new deal that enables PayPal withdrawals via M-Pesa will eat into Equity banks profits

A new deal that will allow M-Pesa users to receive money from any PayPal account across the world directly into their M-PESA accounts in real time has been inked by Safaricom and the international remittance firm Paypal. This comes a few hours before mobile money interoperability goes live in Kenya.

The new deal will also make it be possible for PayPal users in Kenya to load their PayPal wallets via M-Pesa PayBill number 800088. Through this partnership, PayPal is believed to be growing its footprint in Kenya’s growing e-commerce sector, which is witnessing a surge in transactions as more people turn to online shopping as their appetite for convenience grows.

The new partnership will likely eat into Equity Banks long standing dominance with international remittances through Paypal where withdrawals in Kenya were only possible through Equity Bank. In comparison to Equity Bank, Safaricom’s M-Pesa network is far much more accessible, through its 148,000 M-PESA agents around the country vis-à-vis Equity’s estimated 266 bank branches and 40,000 agents.