The Central Bank of Kenya (CBK) has refused to cap the 1,000 shillings and below free M-Pesa transaction per user to five between two numbers.
Telecommunications giant, Safaricom, had moved to petition the Central Bank of Kenya to issue a directive in capping the number of transactions to save it from the massive loss of revenue being witnessed since the first directive in March.
The refusal by the CBK means that Kenyans can send as many 1,000 shilling transactions and below any time and any day without worrying about the transaction charges or being limited by the service provider.
The majority of M-PESA users have been splitting the large transactions into 1,000 per transaction to avoid paying the transaction charges according to Safaricom, leading to massive loss of revenue.
According to Safaricom, some customers are splitting transactions as high as 60,000 shillings into deals of 1,000 just to avoid paying 105 shillings in transaction costs.
Safaricom had also petitioned the Central Bank of Kenya to reduce the free transaction from bank accounts from 1,000 shillings to 500 shillings to reduce the rate of revenue loss that is now estimated at 1.7 billion shillings.
The CBK issued a directive, extending free mobile transactions for Kenyans for amounts 1,000 shillings and below to the end of 2020. The move by CBK was aimed at cushioning Kenyans against the effects of Covid-19.
Safaricom accounts for more than 90 percent of all mobile transactions through the M-PESA platform. The directive had hit them harder than the other players in the same field.
Stakeholders in the sector, however, have to falter the banking regulator for issuing the directive without consulting the players. As much as the CBK had the interest of Kenyans at heart when they made the announcement, they failed to acknowledge and realize the impact of the directive on the economy.
Players are calling on CBK to reconsider the directive.