By Dominic Omondi
Financial sector players have criticised Central Bank of Kenya’s (CBK)
move to unilaterally extend the
waiver on mobile transaction fees to the
end of the year.
Banks and telecommunication providers protested the measure aimed at
cushioning Kenyans against the financial effects of Covid-19 and
promoting cashless transactions, saying they had equally taken a major
hit from the pandemic.
Most of them make money by charging fees on transactions, some of which have since been scrapped.
CBK insisted the extension had the blessing of all the players. However,
insider sources, who did not want to be seen to second-guessing the
financial regulator, said the extension was done without their input.
Over 175,000 M-Pesa operators have been negatively affected by the
measures that waived charges for money transactions up to Sh1,000. The
exemption that came into force on March 16, was announced by CBK
Governor Patrick Njoroge.
With most people transacting directly, M-Pesa agents have found
themselves idle as people see no need to withdraw cash. Moreover, most
dealers miss out on the commission that they get on fees charged per
transaction.
Besides telecommunications providers such as Safaricom and Airtel, banks
have also minted billions from mobile money transactions.
While extending the emergency measures aimed at encouraging usage of
mobile transactions, CBK Governor noted that there had been an increase
in low-value transactions. Eight in 10 mobile transactions are of
low-value sums of below Sh1,000, according to CBK.
Charges for these transactions were scrapped, leading to an upsurge in
the number of customers transacting through mobile phones by 1.6
million, according to a CBK statement.
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