How M-PESA is Tackling High Transaction Costs

M-PESA’s Simple Fix Slashes Erroneous Transactions by Two-Thirds

For years, erroneous M-PESA transactions have frustrated users and cost Safaricom millions in reversal requests. But now, a simple upgrade to Hakikisha, its transaction confirmation feature, has significantly cut daily reversal requests from 12,000 to just 4,000.

A Smarter Way to Verify Payments

Previously, users had to manually cancel transactions within 15 seconds—a system that often backfired. Now, M-PESA has made the process more intuitive, allowing customers to confirm or reject transactions with a simple “Yes” or “No” prompt.

“The call to action was not very clear,” admits Anita Kaunga, M-PESA’s Product Manager for Consumer Payments. The new opt-in system ensures fewer mistaken payments and a smoother user experience.

Ripple Effects Across the Industry

M-PESA’s tweak has influenced Kenyan banks and rival mobile money providers like Airtel Money, many of whom are now adopting similar verification steps to tackle misdirected payments. For banks, where reversals can take a week or more, this change is a game-changer.

Curbing Misuse of Hakikisha

However, not everyone is happy. Some users have been exploiting Hakikisha to check recipient names without sending money. To prevent abuse, M-PESA now limits verification attempts to five per day, disabling the feature for users who exceed the limit.

M-PESA’s Growing Dominance

As M-PESA turns 18 on March 25, it continues to be Safaricom’s biggest revenue driver, generating KES 77.22 billion ($597 million) in revenue in the half-year ending September 2024. With fewer transaction errors and a better user experience, M-PESA is cementing its dominance in Kenya’s digital payments market.