Kenya’s CBK re-introduces charges for transactions between mobile money wallets and Banks

The Central Bank of Kenya (CBK) has released a statement announcing the re-introduction of charges for transactions between mobile money wallets and bank accounts which were waived on March 16, 2020.

The waiver was part of the emergency measures to facilitate the use of mobile money wallets duringf the Covid-19 pandemic in that year. The new charges are significantly lower than those that applied before and will apply after January 1, 2023.

“The revised charges for bank-to-wallet and wallet-to-bank transactions will be announced by respective PSPs and banks and will be effective from January 1, 2023,”

Central Bank of Kenya

The statement which was released by the CBK noted that while the pandemic in 2020 adversely impacted people’s livelihoods and businesses, the measure put in place by the removal of the charges, mitigated its impact and ease the cost of living.

It had been hinted that this development was on the way, following reports that Safaricom and its M-PESA platform were iincurring losses from people who took full advantage of the waiver during the COVID-19 pandemic.

Also, it enabled the payment ecosystem to protect vulnerable Kenyans, support businesses and strengthen economic resilience. As a result, the payments ecosystem expanded significantly.

See the full statement:

In the statement, the CBK reiterated its commitment to facilitate the emergence of a payments ecosystem that works for and with Kenyans.

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The new CBK charges

While restoring the fees, the CBK noted that the maximum charges will now be cut by an average of up to 61 per cent for transfers from bank accounts to mobile money wallets and by an average of up to 47 per cent for transfers from mobile money wallets to bank accounts.

Tariffs for 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.

Further, the charges levied by banks for bank-to-mobile money transactions will be reduced by on average 45 per cent.

Since the charges were removed through October 2022, more than 6.2 million more Kenyans have started using mobile money. From 162 million transactions for KES 234 billion to 440 million transactions worth KES 399 billion, representing an increase of 171% and 71%, respectively, in monthly P2P transactions.

Additionally, from 18 million transactions worth roughly KES 157 billion to over 113 million transactions costing KES 800 billion, an increase of 527 and 410%, respectively, can be seen in the monthly volume and value of transactions between PSPs and banks.

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