CBK reinstates bank to mobile wallet charges, directs firms to cut tariffs
The Central Bank of Kenya (CBK) has reversed the move rolled out at the height of Covid-19 that saw the suspension of charges on the transfer of funds between mobile money wallets and bank accounts.
Starting January 1st next year, customers will start meeting transaction fees for funds transfer from their mobile wallets and bank accounts.
The banking sector regulator has however directed payment service providers to reduce the charges by 61 percent for transfers from banks to mobile money wallets and by 47 percent from mobile money wallets to customer bank accounts.
Specifically, the tariffs for paybills that are used to collect and disburse funds by businesses, companies, and institutions such as schools, utilities, etc, will be cut by on average 50 percent.
Also on the chopping board will be the charges levied by banks for bank-to-mobile money transfers which will be lowered by an average of 45 percent.
The charges were waived on March 16, 2020, as part of the emergency measures undertaken by the government to facilitate use of mobile money in the context of the Covid-19 pandemic. At the time, millions of borrowers were provided with various restructuring options including extension of repayment period, moratorium on principal or interest and waivers on interest or fees.
According to the CBK, the number of Kenyans actively using mobile money increased by over 6.2 million between March 2020 and October this year.
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Further, the volume and value of person to person transactions per month surged to from 162 million transactions worth Kes234 billion, to 440 million transactions worth Kes399 billion, an increase of 171 percent and 71 percent, respectively.
During the period under review, the monthly volume and value of transactions between PSPs and banks increased from 18 million transactions worth about Kes157 billion, to over 113 million transactions worth Kes800 billion, an increase of 527 percent and 410 percent, respectively.
“This outcome confirms that the mitigation measures were timely and effective, and resulted in significant benefits across the financial system. The resumption of revised charges is aimed at building on these gains, facilitate a transition towards sustainable growth of the mobile money ecosystem, and ensuring affordability of payment services for Kenyans,” CBK explained.
