Price sensitive Kenyans may turn to till payments as waiver on mobile transactions fees wind up
Kenyans may turn to rely on Lipa Na M-Pesa when the waiver on mobile money transaction fees under Kes 1000 expires in two months
Loosely translated to ‘Pay with M-PESA’ (mobile money service) Lipa Na M-Pesa allows consumers to buy goods at stores and pay bills with their M-Pesa account. The service has two components, Paybill and Buy goods.
For the Paybill, a buyer is charged a minimal fee for the transaction while a charge of one per cent of the value of the transaction is charged to the merchant for every transaction on buy goods.
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When the Central Bank of Kenya (CBK) gave the country nine months of free transfers for less than Kes 1000, the move deepened scope of digital payments including settlements to businesses.
CBK also waivered fees charged on the transfer of money from banks to mobile wallets to the end of 2020.
The waiver, which involved telco operators and other financial institutions was aimed at trimming the reliance on physical cash as part of measures to contain the spread of the COVID-19 pandemic from person to person.
Recently, the CBK noted the measures had resulted in a significant increase of low-value transactions which now account for 80 per cent of all mobile money transfers.
Subsequently, Kenyans are not only sending money directly as a result but even buying goods by depositing cash to sellers.
The return of transaction fees is set to switch payment transactions to the Lipa Na M-Pesa platform which has an estimated 200,000 merchants as price-sensitive Kenyans seek to take advantage of the lower accompanying fees.
Generally, the increased use of mobile money is also set to continue in a shift from the physical handling currency notes.
