Ever since the pandemic began, many companies made an effort to ease the circumstance by introducing new measures to how they work. Most notably, banks and telcos took a stand to reduce and cut out transaction fees entirely. In this case, we’re looking into KCB who made all their mobile money transactions via M-Pesa free of charge.
KCB Makes Mobile Money Transactions On M-Pesa Free
The Stand and Its Benefits
In the wake of the COVID-19 pandemic, the Central Bank of Kenya (CBK) waived the fees of moving money between mobile wallets such as M-Pesa and KCB bank accounts. The measures were put in place between March 16 and the end of December.
Initially, most bank-to-M-Pesa transactions attracted fees ranging from KES 30 to KES 197. This move would then mean that people could save a few extra coins and also encourage cashless payments on mobile phones helping reduce the spread of the virus.
The move made it easier for users to cope with the situation and also be able to tentatively go cashless. Also for KCB,
- The value of mobile transactions rose by 75.6 per cent from KES 616 billion to KES 1.08 trillion.
- The number of mobile transactions surged from 204 million to 261 million as customers took advantage of the waived fees.
Unfortunately, when you make such a move, you are bound to lose a little more than you need to.
According to Business Daily, KCB lost Sh2.16 billion mobile banking revenue last year on waiver of transaction fees charged to customers. In a breakdown of the financial year that ended December 2020, KCB notes that the mobile banking revenue dropped 22 per cent to KES 7.71 billion.
They are not the only ones who lost out though. Free money transfer cost Safaricom Sh9 billion in six months to last June. Luckily for Safaricom, the CBK ended free M-Pesa transactions of up to KES 1,000.
Banks however do not enjoy the same luxuries. The measures still stand and they have to bear with losses a little while linger