Central Bank of Kenya Reinstates Transaction Fees For Mobile Money Transactions Below Ksh 1,000

Central Bank of Kenya Reinstates Transaction Fees For Mobile Money Transactions Below Ksh 1,000

Mobile money users will starting January 2021 no longer send Sh1000 or less for free.

In a statement, the Central Bank of Kenya (CBK) said providers will reinstate sending fees but will not charge for transactions below Sh100.

“Following consultations with Payment Service Providers (PSPs), CBK will allow the emergency measures to expire on December 31, 2020,” CBK said.

Banks will however continue offering free transfer of cash between accounts and mobile wallets while Saccos will charge transactions.

The waiver was introduced in mid-March for three months but was extended in June to December as a measure to encourage use of electronic money in efforts to curb the spread of Covid-19.

The measure also served to cushion vulnerable Kenyans from costs associated with the transfers from Banks and Telecoms.

Since the introduction of the waiver, the volume of person-to-person transactions increased by 87 percent between February and October 2020, CBK said.

Over the same period, the volume of transactions below Sh1,000 increased by 114 percent, with 2.8 million additional customers using mobile money.

In September, CBK data showed the value of mobile money transactions peaked to Sh450.98 billion in the month of July, a 14.96 percent jump from Sh392.17 in June.

The numbers plummeted in April following the economic slow down brought about by strict Covid-19 protocols.

The value of mobile money transactions dipped to 308 billion in April and have been on a steady rise every month since May.