The Central Bank of Kenya (CBK) has reinstated the mobile money wallet to bank account and vice-versa charges that had been dropped since 2020 at the onset of the COVID-19 pandemic.
Back then, the government, through the CBK, instructed banks and mobile money services providers to drop charges for transactions made between mobile wallets and bank accounts as well as for mobile money transactions below Kshs 1,000. This was part of the government’s means of easing the strain on individuals and businesses as the effects of the global crisis resulting from the freeze occasioned by the pandemic began to set in.
The Kshs 1,000 and below transaction charges for mobile money transfers have since been reinstated.
Under mounting pressure from large industry players like Equity Bank and Safaricom, the Central Bank has caved in and, starting January 1st 2023, those of the bank-to-mobile money wallet and vice-versa will also be reinstated.
“The new charges are significantly lower than those that applied before,” the CBK says in a statement.
How low? Well, this is what the Central Bank says in the statement sent earlier today:
- The revised maximum charges for transfers from bank accounts to mobile money wallets will be reduced by on average up to 61%, and mobile money wallet to bank account by on average up to 47%
- 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%.
- The charges levied by banks for bank-to-mobile money transactions will be reduced by on average 45%. The revised charges for bank-to-wallet and wallet-to-bank transactions will be announced by the respective service providers and banks.
According to the CBK, its COVID-19 mitigation measures, which included the aforementioned financial interventions that affected mobile money wallets and bank accounts as far as transactions went, had a huge positive impact.
“The number of Kenyans actively using mobile money increased by over 6.2 million. The monthly volume and value of P2P transactions increased from 162 million transactions worth Kshs 234 billion, to 440 million transactions worth Kshs 399 billion. an increase of 171 percent and 71 percent, respectively,” the CBK says.
“The monthly volume and value of transactions between PSPs and banks increased from 18 million transactions worth about Kshs 157 billion, to over 113 million transactions worth Kshs 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. 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.”
