Kenyans to be fully charged for digital banking in 2023
As Kenya experienced a surge in use of mobile money platforms during COVID-19, financial institutions had to invest in infrastructure and now the country’s Central Bank (CBK) has responded to demand from the financial services sector and reinstated transaction fees to compensate.
Prior to March 2020, banks charged between Ksh30 and Ksh197 in transaction fees.
When COVID-19 initially hit, transaction fees (including that charged for deposits and withdrawals between mobile money wallets and bank accounts) were suspended.
Telecommunications firms also stopped person-to-person (P2P) transaction fees of below KES 1,000 to enable subsidised mobile money transfers.
While P2P transaction fees were reapplied in 2021, the CBK has announced that all charges will be reinstated and enforced as from January 2023.
The CBK stated: “While COVID-19 adversely impacted people’s livelihoods and businesses, mitigation measures enabled the payment ecosystem to project vulnerable Kenyans, support businesses and strengthen economic resilience.”
The regulator says the number of mobile money users increased by 6.2 million between March 2020 and October 2022.
“Following the consultation with PSPs and banks, CBK has reviewed the applicable maximum charges for transactions between mobile money and bank accounts,” it added.
Although the banks have jurisdiction to apply whatever rate they would like, the new charges will be less than those in place prior to March 2020.
Charges applied to bank to mobile money wallets will be reduced by 61%, while mobile money to bank account transactions will be 47% cheaper on average.
Paybill tariffs or that applied to mobile money merchant payment accounts that constitute consumer-to-business payments, will be lowered by 50%.
The CBK confirmed that banks and telecommunications services providers will announce their respective transaction fees in January 2023.