How Kenyans are beating high money transfer fees
A client using mobile phone to make a transaction. The Central Bank of Kenya (CBK) had in December last year announced the reinstatement of bank to mobile money wallet transfer charges.
A large number of Kenyans have turned to transacting small amounts of money that attract no or less fees, following the resumption of full charges this year.
New data by the Central Bank of Kenya shows that despite the number of mobile money transactions rising by close to 60 million between January and May as compared to a similar period last year, the value transacted reduced by Sh76 billion.
A total of 988.79 million mobile money transactions were performed in the country from January to end of May being 6.3 per cent higher than the 930.25 million deals during a similar period last year. But while the number of transactions grew, the value reduced from Sh3.17 trillion to Sh3.09 trillion, during the comparative periods.
Safaricom early this year confirmed that the number of transactions customers perform have gone up by 16 per cent.
“The underlying ecosystem of M-Pesa is very strong, the volumes and value have grown 32 percent and number of transactions per customer per month by 16 per cent, which means that customers are finding more and more use cases for them to use M-Pesa,” Safaricom’s Chief Finance Officer (CFO) Dilip Pal indicated during the release of the company’s financial results for the financial year ended March 2023. The financial market regulator reinstated charges for transactions between mobile money wallets and bank accounts at the start of 2023, ending a three-year waiver since onset of Covid-19 pandemic.
“The new charges are significantly lower than those that applied before and will apply after January 1, 2023. While Covid-19 adversely impacted people’s livelihoods and businesses, mitigation measures enabled the payments ecosystem to protect vulnerable Kenyans, support businesses, and strengthen economic resilience,” the CBK stated in the December 6, 2022 announcement on the reintroduction of the charges.
It indicated that waiving the charges saw the number of Kenyans using mobile money grow by over 6.2 million, monthly volume and value of person-to-person (P2P) transactions from 162 million transactions worth Sh234 billion, to 440 million transactions worth Sh399 billion and the monthly volume of transactions between payment service providers and banks rise by 527 per cent.
“The resumption of revised charges is aimed at building on these gains, facilitate a transition towards sustainable growth of the mobile money ecosystem, and ensuring affordability of payment services for Kenyans,” the CBK stated.
The latest data reveals that while transactions have continued to increase despite the resumption of the charges this year, albeit not to the levels that prevailed before the 2020 waiver, their value has declined by about 2.5 percent.
