The Central Bank of Kenya (CBK) has announced plans to reintroduce charges for transactions involving mobile money wallets effective from January 2023. The new charges are intended to ensure that the operation of mobile money wallets is fair, transparent and competitive while protecting consumers from excessive costs.
The CBK will impose the charges following studies conducted to investigate the impact of the Covid-19 pandemic and the resulting regulations on the Kenyan mobile money market. The studies revealed that the increased demand for mobile money services brought in significant revenues to service providers, but at the same time, customers experienced a lack of transparency over the fees and charges imposed by some of the service providers.
In order to ensure a fair and competitive market, the CBK will introduce charge bands depending on the amount of money transferred. Transaction fees for amounts under KSH 500 will be 0.3%, increasing up to 0.75% for amounts over KSH 10,000. The CBK has also announced plans to reduce the amount of service provider commissions which, in turn, will reduce overall costs for consumers. In addition, it is expected that some mobile money service providers will become members of the credit reference bureau, enabling customers to access credit easier.
It is hoped that the introduction of the charges will encourage greater competition in the mobile money market, which in turn, will benefit the millions of Kenyans who depend on mobile money to make payments and transfer money from one account to another. The CBK believes that the implementation of the charges, as well as the reduction of service provider commissions, will benefit customers in the long-term.
The CBK also warned mobile money service providers to adhere to the new regulations and warned that failure to do so may result in punitive measures such as suspension or suspension of services and penalties.
The new charges will come into effect from January 2023, so it is important that customers are aware of any changes to fees and charges from their respective service providers. It is also important that customers shop around and compare prices in order to ensure they are receiving the best deal.