The Central Bank of Kenya (CBK) has announced the reintroduction of charges for transactions between mobile money wallets and bank accounts.
The charges were waived on March 16, 2020, as part of the emergency measures to facilitate use of mobile money in the context of the COVID-19 (Coronavirus) pandemic.
However, according to the CBK, the new charges are significantly lower than those that applied before and will apply after January 1, 2023.
“While COVID-19 adversely impacted people’s livelihoods and businesses, mitigation measures enabled the payments ecosystem to protect vulnerable Kenyans, support businesses, and strengthen economic resilience. As a result, the payments ecosystem expanded significantly,” CBK said in a statement on December 6, 2022.
Between March 2020 and October 2022, CBK noted, the number of Kenyans actively using mobile money increased by over 6.2 million.
Further, the monthly volume and value of P2P transactions increased from 162 million transactions worth Ksh.234 billion, to 440 million transactions worth Ksh.399 billion, an increase of 171 percent and 71 percent, respectively.
Value of transactions
The monthly volume and value of transactions between PSPs and banks increased from 18 million transactions worth about Ksh.157 billion, to over 113 million transactions worth Ksh.800 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,” said the Central Bank of Kenya.
The resumption of revised charges, CBK noted, 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.
And following consultations with PSPs and banks, CBK said it had reviewed the applicable maximum charges for transactions between mobile money and bank accounts, and their alignment to the Pricing Principles.
Re-introduced charges
Relative to the charges that applied until March 16, 2020, the reintroduced charges have the following elements:
– The revised maximum charges for transfers from bank accounts to mobile money wallets will be reduced by on average up to 61 percent, and mobile money wallet to bank account by on average up to 47 percent.
– Tariffs for paybills 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 percent.
– The charges levied by banks for bank to mobile money transactions will be reduced by on average 45 percent.
“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,” noted the regulator.
This is even as it reiterated its commitment to facilitate emergence of a payments ecosystem that works for and with Kenyans.
“CBK will continue to monitor developments in the payments ecosystem and take action where necessary,” it added.
