Safaricom, Banks Want Free Mobile Money Transactions Ended

Image courtesy Financial Times

Safaricom and commercial banks are seeking a deal with the Central Bank of Kenya (CBK) to end the charge waiver agreement that was made earlier this year amid the COVID-19 pandemic.

The telco and the banks have now moved forward to push for the CBK to consult them in case the regulator decides to extend the tenure free transactions beyond the end of this year.

CBK announced the waiver of charges on M-PESA transactions of up to KES 1,000 on March 16th. 6 months later on June 30th, the order was extended to Dec 31st 2020. This was clearly a decision that drew protests from Safaricom and banks who have been losing billions of shillings monthly due to the free service.

The order was meant to be a relief measure for Kenyans as well as encourage cashless payments in a bid to curb the spread of COVID-19.

Safaricom’s CEO, Peter Ndegwa, said the telco was in advanced talks with the CBK over the resumption charges on low-value M-PESA transactions.

“We are not ready at this stage to announce when the free cash transfers end as we are still in engagements with the CBK,” said Mr Ndegwa.

This comes about a week after Safaricom released its financial report that records KES 9 billion loss in the six months to June. According to the firm, this ended up costing it 6% drop in net profit to KES 33.07 billion, the first fall in 9 years.

Additionally, banks joined Safaricom with the same sentiments. “We are having engagements with the CBK at the moment. We are optimistic that maybe some transactions will go back to where we were before and maybe others continue under the current waiver,” said KCB Group CEO Joshua Oigara.

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  1. […] and mobile money wallets. This decision comes after commercial banks have been advocating for the return of these bank to M-PESA charges for months. The charges were originally suspended on March 16, […]

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