The CBK took a hard stance in March, at the onset of covid19 in Kenya, allowing Kenyans to send cash via mobile money platforms up to Ksh 1000 for free.
The same applied to cash transactions between mobile money wallets and bank accounts.
But now, after extending the transaction waiver in June , the CBK has ended the initiative.
Since the current waiver ends December 31st, Kenyans will now have to pay transaction fees for cash transfers below Ksh 1000 starting January 1st, 2021.
The CBK says only amounts below Ksh 100 will continue to be free to send.
“Following consultations with Payment Service Providers (PSPs), CBK will allow the emergency measures to expire on December 31, 2020,” the CBK says.
The transaction waiver was put in place to cushion the country against the effects of covid19 and push mobile money usage over cash to prevent the virus’s spread.
Transferring cash between bank and mobile money accounts will, however, continue to be free. On the other hand, Sacco’s will reinstate transaction fees.
The regulator says it has seen immense growth in mobile money usage since the start of transaction waiver in mid-March.
The monthly volume of P2P transactions (cash send from one mobile money user to another) rose by 87 percent between February and October. There has also been growth in business-related transactions as well, and there’s an additional 2.8 million mobile money users since.
The volume of transactions below the waiver threshold of Ksh 1000 increased 114 percent. Presumably, this could be attributed to split transactions to avoid fees( Safaricom cried foul of this in July , urging the CBK to limit the number of free cash transfers below Ksh 1000 to five per day – but it was unsuccessful).It goes without saying that Safaricom PLC’s mobile money platform M-Pesa is the whale in the market – with nearly 99 percent market share as of March.The telco was hard hit by the waiver causing the company’s half-year revenue to drop 6 percent to Ksh 33 Billion . Follow us on Telegram , Twitter , Facebook , or subscribe to our weekly newsletter to ensure you don’t miss out on any future updates.
