Safaricom’s M-Pesa has recorded its first-ever decline in the number of agents after introducing a new policy that secures accesses to specific sites to combat fraud.
Under a concept known as geo-locking, Safaricom only allows M-Pesa agents to operate fields within specified geographic locations.
This means that if the operator moves from a particular location, the cashier automatically shuts down and customers cannot withdraw or deposit cash.
A new disclosure by the telco shows that 8,344 M-Pesa agents closed their doors in the year to March 2024, ostensibly disillusioned with the new policy, which forces them to work at a specific location at all times.
“We have seen a decline in active agent numbers (in FY2024) due to the introduction of geo-locking for farmers,” Safaricom said in a new report.
The number of M-Pesa agents fell to 262,016 in March 2024, down three percent from 270,360 last year, an extraordinary decline in what has been the livelihood or income of thousands in the country.
For Safaricom, while the decline in the number of agents may not be a good sign for its M-Pesa business, the new policy will help it deal with the long-standing fraud menace, which has cost agents and customers millions of shillings.
“Although this resulted in a decrease in the number of active customers, it effectively reduced fraud,” Safaricom said.
The geographic lock-in of farms “in turn increased compliance from a regulatory standpoint.”
“It has also made it possible to identify areas of opportunity based on existing tools operating in the market.”
The telco has recorded a rise in the number of fraud cases investigated, more than tripling from 33 last year to 103 this year, partly due to the inclusion of its Ethiopian unit on the list.
However, the number of cases of asset misappropriation, which includes theft of funds, has decreased to zero, while the majority of fraud cases investigated were related to policy violations and unauthorized access by employees.
Overall, the number of mobile money agents over the same period fell by just 873, meaning that while Safaricom’s M-Pesa agents declined, other mobile money providers – Airtel Money and T-Kash, saw their number rise. Agents.
The number of mobile money subscriptions and transactions and the total value of transactions also rose during the same period, indicating that the industry has remained resilient despite the departure of M-Pesa agents.
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