CBK: Free mobile-money transfers will cease from January 1st

The Central Bank of Kenya (CBK) has announced that the waiver of fees on mobile-money transfers below Ksh. 1,000 will end from January 1, 2021. 

Charges for transfers between banks and mobile will remain, according to a statement released on Thursday. 

CBK stated, “Following consultations with Payment Service Providers (PSPs), CBK will allow the emergency measures to expire on December 31, 2020, and PSPs will introduce revised pricing structures from January 1, 2021.” 

However, person-to-person transfers of up to Ksh. 100 to any customer and network will not incur any charges. 

Transfers between mobile money wallets and bank accounts will also be exempted from charges. 

According to CBK, entities regulated by the Sacco Societies Regulatory Authority (SASRA) may levy a charge for transfers between SACCO accounts and mobile money wallets to facilitate the integration of Savings and Credit Societies (SACCOs) with the mobile money ecosystem. 

The regulator will oversee the charges in the context of the products that banks and PSPs offer to SACCOs.

CBK's statement also reads, “Going forward, PSPs will propose pricing structures that reflect the “Pricing Principles” that CBK has introduced. These “Principles” aim to support the development of an efficient, safe and stable payments and mobile money ecosystem where the customer and public interests are adequately protected.” 

CBK announced a waiver on mobile money transactions on March 16, 2020 as part of emergency measures to facilitate increased use such transactions instead of cash to uphold social distancing and avoidance of contact. 

The measures were to run until June 30, 2020 but after review, they were extended until December 31, 2020. 

The measures proved to be timely and effective as there has been a significant increase of mobile money usage during the waiver period. 

CBK added, “For instance, the monthly volume of person-to-person transactions increased by 87 percent between February and October 2020. Over this period the volume of transactions below Ksh. 1,000 increased by 114 percent, while 2.8 million additional customers are using mobile money. Business-related transactions also recorded significant growth over the same period.” 

CBK's reassessment of the emergency measures

was a step towards consolidating the gains made so far and facilitating a transition towards the mobile money ecosystem's sustainable growth.