Covid-19 was supposedly a boost to mobile money use in Kenya after the Central Bank of Kenya (CBK) allowed free M-Pesa and mobile banking transactions until the end of the year. However, Safaricom is apparently not thrilled by the possibility that this ruling may be extended into 2021.
According to Kenya’s news media, Safaricom and the country’s banks want the CBK to involve them in any decision on extending free transaction rules beyond the end of the year.
It may have seemed like good news for all players when CBK announced the removal of charges on M-Pesa transactions of up to Sh1,000 ($9.15) from 16 March until 30 June – and then extended the ruling until the end of the year. After all, this should encourage new customers to adopt cashless payment, while also reducing the health risks involved in handling money. Bank-to-mobile-phone transactions also saw their charges removed.
But Safaricom and the banks have apparently lost billions of shillings on the free service. And with Covid-19 nowhere near under control yet (there has recently been a spike in Covid-19 cases in Kenya), the CBK may feel obliged to extend the scheme, a prospect that is evidently worrying mobile banking and payment enablers. To make thing worse, canny customers have reportedly been splitting high-value M-Pesa transfers into multiple transactions to avoid paying any fees.
This isn’t the only challenge the Kenyan mobile money innovator has faced recently. As we reported yesterday , Safaricom is expected to revise down its bid for an operating licence in Ethiopia following the revelation that mobile money offerings will be the exclusive preserve of local financial institutions.
