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The High Court of Kenya has ordered Safaricom and the Central Bank of Kenya to suspend the recently reintroduced bank-to-M-PESA charges. This is following a suit filed by Nairobi resident, Mr. Moses Wafula, seeking the protection of financial consumer rights.
The Central Bank of Kenya (CBK) in December 2022 announced that it will reinstate charges for money transfers between bank accounts 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.
High Court of Kenya Suspends Bank-to-M-PESA Charges
The charges were originally suspended on March 16, 2020, as a temporary measure to encourage the use of mobile money during the Covid-19 pandemic. They have just been reintroduced on the 1st of January 2023.
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Mr. Wafula argues charges incurred in Mpesa Paybill services are to be paid for by Safaricom’s primary clients such as banks and not the consumers.
“The petition pending determination illustrates that the engagement between Safaricom and its M-Pesa Paybill clients is a bipartite business engagement between Safaricom as the M-Pesa paybill service provider and their M-Pesa paybill primary clients being the service recipients.” Mr. Wafula as quoted on this petition.
These clients are such as Banks, Government agencies, Kenya power, Dstv, betting firms, mobile money companies, and other institutions. The resident has asked the high court to find Safaricom in violation of financial consumer rights.
An interim order to apply a temporary suspension of the charges until the case is determined was issued by High Court judge Mugure Thande. This case will focus on the area of payment services provided by Safaricom Limited as Lipa Na M-Pesa Pay Bill Service.
“Safaricom has no authority to charge members of the public for a service offered to its contracting service recipients, including banks.”
I tried to test just before the publication of this article whether the order had been implemented. As far as my Equity account is concerned, I am still being charged transaction costs for bank-to-M-PESA transfers.
The case will be mentioned on January 23, 2023.
Mr. Wafula argues charges incurred in Mpesa Paybill services are to be paid for by Safaricom’s primary clients such as banks and not the consumers.