Mobile-Bank Charges To Resume On Sunday

By Jane Muia / Published December 31, 2022 | 10:56 am

KEY POINTS

Transactions for PayBills will be halved by 50 percent while the charges levied by banks for bank-to-mobile money transactions will be reduced by 45 percent.

Before the free transfers were introduced, most bank-to-M-Pesa transactions attracted fees ranging from 30 shillings to 197 shillings.

KEY TAKEAWAYS

CBK noted that between March 2020 and October 2022, active mobile money users has risen by 6.2 million while the monthly volume and value of Person-to-Person transactions increased from 162 million transactions worth 234 billion shillings to 440 million transactions worth 399 billion shillings. This represents an increase of 171 percent and 71 percent respectively.

Kenyans will from Sunday 1st January incur some charges when transferring money from their banks to mobile money wallets.

This is after The Central Bank of Kenya (CBK) announced the return of charges on transactions between mobile money and bank accounts. The charges were suspended on March 2020 in a move aimed at discouraging the use of cash during payments to contain the spread of COVID-19.

CBK said The resumption of revised charges is geared towards building on the gains on the financial system, as well as facilitating a transition towards sustainable growth of the mobile money ecosystem.

The charges introduced by the regulator are however low compared to those applied before. CBK said the slashing of the charges is aimed at providing affordable services to Kenyans who are grappling with the high cost of living.

Kenyans will now pay up to 61 percent low to transact from bank accounts to mobile money, and up to 47 percent low while transacting from mobile money wallets to bank accounts.

“The revised charges for bank-to-wallet and wallet-to-bank transactions will be announced by respective Payment Service Providers (PSPs) and banks, and will be effective from January 1, 2023,” the CBK stated in a notice.

Transactions for PayBills will be halved by 50 percent while the charges levied by banks for bank-to-mobile money transactions will be reduced by 45 percent.

Before the free transfers were introduced, most bank-to-M-Pesa transactions attracted fees ranging from 30 shillings to 197 shillings.

The lenders have been pushing their regulator to reinstate fees on the transfer of cash between accounts and mobile phone wallets just like it ended free M-Pesa transactions of up to 1,000 shillings.

Safaricom said that the free M-Pesa transfer cost it 9 billion shillings in the six months to June 2020, which saw the firm report a six percent drop in net profit to 33.07 billion shillings—the first fall in nine years.

Banks have protested the waiver of the fees citing heavy investments in digital technology to keep pace with the growing volume of transactions while counting huge losses.

The value of free cash transfers between bank accounts and Safaricom’s M-Pesa mobile wallets rose by half to 3.73 trillion shillings in the six months to September 2022 as zero rating of fees continued to drive usage.

Over the same period, the monthly volume and value of transactions between PSPs and banks increased from 18 million transactions worth about 157 billion shillings to over 113 million transactions worth 800 billion shillings, representing 527 percent and 410 percent respectively.