Back in 2020 as the COVID-19 pandemic was spreading, the Central Bank waived the transaction fees between mobile money wallets and banks. The fees for mobile money transactions below Ksh 1,000 were also waived. This was meant to get money to flow through the economy whose growth was slowing down.
Most banks and even Safaricom were not happy with this decision as they argued that it would reduce their profit margins. Their protests landed on deaf ears as the transaction fees were done away with in the end.
Even as banks and telcos seem not happy with the decision, it really helped the industry as a whole. According to the Central Bank, mobile money uptake has been on the rise with 6.2 million new users. Person-to-person transactions reached Ksh 440 billion up from Ksh 234 billion. This is good for the economy as it means more money is flowing through the economy which is always a good thing.
Banks and Payment Service providers want charges re-introduced
Even though the removal of transaction charges was good for the economy, the Payment service providers and banks are not happy with the decision. According to the Central Bank, after consultations with both banks and payment service providers, they have decided to reintroduce the transaction fees for mobile money and bank transfers.
The transaction fees will be implemented as from January 1st so you still have time to plan accordingly. Each bank will charge differently and we cannot know the exact figure as of now.
“The revised maximum charges for transfers from bank accounts to mobile money wallets will be reduced by on average up to 61 per cent, and mobile money wallet to bank account by on average up to 47 per cent,” the statement from the CBK read. “Tariffs for pay bills that are used to collect and disburse funds by businesses, companies, and institutions such as schools, utilities, etc, will be reduced by on average 50 per cent.”
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