Banks can now charge for money transfer from accounts to mobile wallet and vice versa after the Central Bank of Kenya lifted the fee moratorium.
A freeze on the transaction fee came into effect on March 16, 2020, as part of the emergency measures t0 facilitate use of mobile money at the height of Covid-19 pandemic.
Despite this coming as bad news to Kenyans at a time that the inflation is at a 9.5 percent, CBK says the new charges will be significantly lower than what applied before.
“The Central Bank of Kenya (CBK) announces the reintroduction of charges for transactions between mobile money wallets and bank accounts, which will apply after January 1, 2023,” CBK said in a communication.
This is good news to banking institutions that have been calling on the regulator to lift the suspension of the fees in an effort to boost their revenues.
In the new changes the revised maximum charges for transfers from bank accounts to mobile money wallets will be cut by an average up to 61 percent, and mobile money wallet to bank account by on average up to 47 percent.
Tariffs for pay bills that are used to collect and disburse funds by businesses, companies, and institutions such as schools, utilities, on the other hand will be reduced by an average 50 percent.
The charges levied by banks for bank to mobile money transactions will be reduced by on average 45 percent
“Following consultations with payment service providers and banks, CBK has reviewed the applicable maximum charges for transactions between mobile money and bank accounts, and their alignment to the Pricing Principles,” the Central Bank said in a statement.
The regulator said the move to scrap the fees saw the number of Kenyans actively using mobile money increase by over 6.2 million in the period.
The monthly volume and value of Person to Person transactions increased from 162 million transactions worth Sh234 billion to 440 million transactions worth Sh399 billion.
The monthly volume and value of transactions between PSPs and banks increased from 18 million transactions worth about Sh157 billion to over 113 million transactions worth Sh800 billion, an increase of 527 percent and 410 percent, respectively.
A report by CBK show that the cash mobile money agents handled in the nine months to September went up by 17.6 percent, indicating the growing mobile money penetration in Kenya.
CBK data shows the transactions were recorded at Sh5.91 trillion, up from Sh5.03 trillion in similar period in 2021, doubling in four years.
This underpins the growing place of mobile money and the high penetration rate in the country whereby money is transferred through mobile money channels while others deposit hard cash at the agents to make payments such as school fees, rent, water bills and government services.
