I&M bucks the trend with cash transfer fees waiver


Wednesday February 15 2023


I&M Bank signage at a branch on Kenyatta Avenue, Nairobi. PHOTO | FRANCIS NDERITU | NMG

I&M Bank has permanently dropped levy fees for transferring cash between its platform and mobile wallets, bucking the trend in the sector that has been reinstating the charges since January amid customer outcry.

The move will save I&M customers between Sh10 and Sh65, the range the lender was charging after the Central Bank of Kenya (CBK) announced a return of charges on transactions between banks and mobile money wallets.

The CBK had temporarily stopped the charges from mid-March 2020 in a bid to lower the risk of Covid-19 infections by encouraging cashless transactions but reinstated the charges in January.

The waiver makes I&M the first lender in Kenya to officially offer zero fees for bank to M-Pesa and Airtel Money transactions. The lender said it would extend the waiver to T-Kash transactions for Telkom users.

The lender had cut the charges from the pre-Covid range of Sh12 to Sh84 to between Sh10 and Sh65, in line with CBK guidelines, but has now decided to do away with the charges entirely.

I&M general manager for digital business Michael Mwangi said the waiver is aimed at supporting the customers transacting on its digital platforms.

“We believe this move will offer new and existing customers a huge relief during tough economic times and encourage more customers to transact on mobile,” said Mr Mwangi.

“As part of our approach to service delivery, recent customer feedback showed that as much as our transaction rates are favourable, there was an opportunity to review our policies on bank to mobile money wallet charges for the digitally active customer.”

Read: Billions behind battle to keep bank charges

All I&M peers, including KCB, Equity, Cooperative, NCBA, Absa Kenya, Standard Chartered Bank Kenya, Diamond Trust Bank and Stanbic, have reinstated the transaction charges after CBK lifted the freeze last December.

Some lenders had attracted backlash for reintroducing the charges despite the High Court on December 19, 2022, issuing interim orders suspending the return of the levies until the case was heard and determined.

I&M wants to ride on the free transfers to grow its digital banking products in line with its current iMara 2.0 strategy.

“We look forward to seeing these numbers grow with digital transactions gaining favour among our digitally active customers,” said Mr Mwangi.

CBK’s reintroduction of charges order was unsuccessfully challenged in court.

The regulator, in the December 6 update indicated that maximum charges for transfers from bank accounts to mobile money wallets would be reduced by up to 61 percent, while mobile money wallet to bank account would fall by up to 47 percent.

The waiver of charges had seen the number of Kenyans actively using mobile money increase by over 6.2 million, with the monthly volume of person to person (P2P) transactions rising to 440 million from 162 million. The value of P2P transactions rose from Sh234 billion to Sh399 billion.

The monthly volume and value of transactions between payment service providers and banks increased from 18 million transactions worth about Sh157 billion to over 113 million transactions worth Sh800 billion.

Beryl Onyango

Beryl Onyango is a CPA and economics degree holder who has dedicated her career to helping others navigate the complex world of finance. Beryl has spent the past 3 years working as a finance specialist in a fintech company and has 6 years of experience in finance, working with a diverse range of clients and industries. Beryl's expertise lies in budgeting, saving, investing, and retirement planning, but she also has a deep understanding of various other areas of finance. She is interested in financial technology and how it changes how we manage our finances. As a finance writer, Beryl has been sharing her insights and knowledge through her writing, covering various finance and personal finance topics. Her goal is to educate and empower individuals to take control of their finances and achieve their financial goals. In addition to her professional experience, Beryl is a lifelong learner, always seeking to expand her knowledge and stay up-to-date with the latest developments in finance. She is also a strong communicator, able to explain complex financial concepts in a clear and easy-to-understand manner. Beryl believes that financial literacy is the key to achieving financial success, and she is dedicated to helping others achieve their financial goals.

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