BUSINESSECONOMY

CBK Reinstates Transaction Charges on Sacco Mobile Money Wallets

Share
Central Bank Governor Patrick Njoroge. The CBK has reinstated charges on transactions effected through bank-specific Sacco mobile money wallets.
Central Bank Governor Patrick Njoroge. The CBK has reinstated charges on transactions effected through bank-specific Sacco mobile money wallets.
Share

The Central Bank of Kenya (CBK) in a notice issued on Thursday, April 1 announced the resumption of charges for transactions above Ksh100 effected through bank-specific (in-house) mobile money wallets linked to the Savings and Credit Societies (Sacco) sector.

CBK cited concerns that the current price regime could spell doom for the viability of the services offered by saccos which rely on the integrations to connect them to the mobile money ecosystem, given the underlying costs.

“Through them (bank-specific wallets), banks provide saccos with an important bridge to the domestic and cross border payment system.

“…This is a significant risk for Saccos and their extensive membership due to the lack of other alternatives to connect to the mobile money ecosystem. The resumption of charges will provide space to increase connection options for Saccos,” the CBK noted.

With Kenya’s strong Sacco culture, the resumption of transaction charges is expected to add onto the woes of many Kenyans already struggling under the weight of harsh economic times.

A person using multiple smart phones at the same time. The cost of transactions on mobile money services such as M-Pesa has many Kenyans looking for cheaper ways to send money and make payments.
A person using multiple smart phones at the same time. The cost of transactions on mobile money services has many Kenyans looking for cheaper ways to send money and make payments.

CBK stated that the resumption of charges would be subject to review in line with principles announced in December 2020 of customer centricity, transparency and disclosure, fairness and equity, choice and competition and affordability.

Banks in Kenya typically deploy two kinds of mobile money wallets. The first involves partnership with payment service providers to utilize their mobile money wallets to facilitate a range of transactions through customers’ bank accounts.

READ ALSO>>>>>Avoiding M-Pesa Charges, Kenyans Exploit CBK Directive to Enjoy Free Transfers, Payments

The second model (in-house) sees banks invest directly in their own in-house mobile banking wallets to facilitate mobile money and other wallet-based financial services. This model usually involves a third party as a technology provider.

Charges on the mobile money transactions were initially scrapped as part of CBK measures in response to the Covid-19 pandemic in April 2020.

At the time, charges on mobile money transactions of Ksh1,000 or less were also scrapped before being re-introduced at the start of 2021.

READ>>>>>Keep Our Loans Secret – Banks Urge CBK Over Investor Fears

Written by
MARTIN SIELE -

Martin K.N Siele is the Content Lead at Business Today. He is also a Quartz contributor and a 2021 Baraza Media Lab-Fringe Graph Data Storytelling Fellow. Passionate about digital media, sports and entertainment, Siele also founded Loud.co.ke

1 Comment

  • Am a member of a newly formed Sacco and members has been complaining in the last two days of transaction charges . The government is taxing everything .

Leave a Reply

Your email address will not be published. Required fields are marked *

PAST ARTICLES AND INSIGHTS

Related Articles
Diageo exit was apparent even as EABL is building its war chest with a KSh 20 bn Cash Call
FEATURED STORY

 Diageo UK Plc Finally Exits East Africa’s Beer Market

Diageo Plc UK, a global brewing giant has sold its entire stake...

Sacco loans are popular with land , home buyers
FEATURED STORY

SACCO Loans for Land and House Purchases fall to KSh32.7Bn In September

SACCOs (Savings and Credit Cooperative Societies disbursed loans to members seeking to...

Edwin Dande CEO Cytonn Investments
FEATURED STORY

Cytonn Empire: How COVID-19 Pandemic Wreaked Havoc On Its Grand Real Estate Pipeline

Cytonn Investments Plc, a leading asset management firm, had a sound idea....

Dr Peter Ndegwa Safaricom Group Plc CEO
FEATURED STORY

Safaricom Secures US$138m from Standard Bank for Its Ethiopian Subsidiary

Safaricom Plc, a leading telecommunications firm, has sealed a $138m funding deal...