Sep 02, 2014

Outsmarting MPESA's new rates

MPESA

Last week, we carried the news of Safaricom’s new MPESA rate and posed the question whether the new rates were more expensive. The general consensus was that they were, but a few people appreciated the lower limits, allowing one to send as low as 10/-, the fact that the withdrawal minimum is 50/- aside.

However, we also observed something interesting:

@coldtusker tweets

On closer inspection, we realized there was indeed jump between bands that does not makes sense. Sending 100/- to a registered MPESA user will cost you 5/-, but sending 101/- to the same user will cost you 25/- Based on this observation, we’ve worked out a way to minimize your costs while sending money.

If you are sending between 101/- and 449/-  do not send the money as a lump-sum. You are better of breaking it down into 100s. For instance, to send 120/-, do not send 120/- at once as it will cost you 25/-. Send 100/-, then 20/- which will come to 8/- in charges. If you are sending 400, send 100/- four times to get a cost of 20/-, rather than 25/-

The table below shows our “Oustmart MPESA” tariff :)

Unfortunately, as you can see, this ‘break down’ tariff only works for figures between 101/- and 449/- and for the 401 to 449 bracket, the saving is only 2/-

Above 500/-, breaking down the payments will make sending more expensive.

Will you implement the breakdown tariff to save costs? What other loopholes have you come across?