CBK extends free mobile money transactions below Ksh.1000 for the rest of 2020


CBK extends free mobile money transactions below Ksh.1000 for the rest of 2020
A File Image of the Central Bank of Kenya (CBK) in Nairobi's Haile Selassie Avenue

In Summary

  • Additionally, the CBK has retained the reviewed tariff of mobile-money transactions above Ksh.70,000 while retaining the waiver on fees charged by payment service providers (PSPs) and commercial banks for transfers between mobile money wallets and bank accounts.
  • The CBK agreed to the waiver of the fees with mobile-money operators on March 16, as the sector voted to support mitigation measures to contain the virus.
  • The measures have however impacted on revenue earned by the operators with Safaricom for instance reporting the loss of an estimated Ksh.5.5 billion in M-Pesa in three months to June 30.

Kenyans will continue enjoying free mobile money transactions below Ksh.1000 for the rest of the year.

This follows the Central Bank of Kenya (CBK) extension of measures to promote cashless transactions amidst the COVID-19 pandemic.

“CBK notes that the measures were timely and highly effective in facilitating official and personal transfers at a time of great need,” the banking sector regulator noted in a statement issued on Wednesday.

Additionally, the CBK has retained the reviewed tariff of mobile-money transactions above Ksh.70,000.

Moreover, the reserve bank has retained the waiver on fees charged by payment service providers (PSPs) and commercial banks for transfers between mobile money wallets and bank accounts.

The CBK agreed to the waiver of the fees with mobile-money operators on March 16, as the sector voted to support mitigation measures to contain the virus.

The measures have however impacted on revenue earned by the operators with Safaricom for instance reporting the loss of an estimated Ksh.5.5 billion in M-Pesa in three months to June 30.

The cushioning has however achieved its desired impact as Kenyans mark an increase use of mobile money facilities.

A significant increase in the use of mobile money channels by individuals in both value and number of transactions was noted. Most of the increase was in low-value transactions of Ksh.1,000 or less—this band accounts for over 80 percent of mobile money transactions and charges were eliminated, which has helped cushion the most vulnerable households,” added the CBK.

“Moreover, more than 1.6 million additional customers are now using mobile money channels.”

According to an analysis of data from the CBK, daily mobile money transaction increased by an average 9.4 percent as of April 20 in the aftermath of the emergency measures.

The average daily transactions at 5.8 million as of April 20 in comparison to 5.3 million transactions prior to the onset of the Covid-19 pandemic.

Daily average transaction volumes between Ksh.101 and Ksh.1000 meanwhile increased by 1.5 million and represented a mean value of Ksh.1.9 trillion in the period.

Moreover, the new Ksh.70,001-Ksh.150,000 band recorded an average of 5,457 daily transactions valued at Ksh.564.5 million a day.

Transfers between banks and personal mobile wallets rose at a higher 22.2 percent on a weekly basis since the waiver on fees to stand at Ksh.2.2 million in a day with an accompanying value of Ksh.17.4 billion.

On the vice-versa, transfers from electronic wallets to bank accounts rose at the fastest pace of 45.7 percent with values likewise soaring by 20.3 percent to a Ksh.17.4 billion weekly basis from Ksh.7.9 billion.

The average value of all mobile money transactions per day was however on the decline shedding 5.1 percentage points to stand at a mean Ksh.7.5 billion.

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Story By Kepha Muiruri
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