A Safaricom subscriber on their phone. Free M-Pesa transfers on amounts of Ksh1,000 and below will expire on December 31, 2020.
A Safaricom subscriber on their phone. Free M-Pesa transfers on amounts of Ksh1,000 and below will expire on December 31, 2020.

The Central Bank of Kenya (CBK) on Thursday, December 17 issued a statement on measures introduced to promote cashless payments during the Covid-19 pandemic.

Mobile money transfers of amounts of Ksh1,000 and below have been free since March 16 when the measures were announced. The measure will lapse on December 31, 2020.

Payment Service Providers (PSPs) will be required to introduce revised pricing structures in line with various directives from CBK.

Most notably, there will be no charge for person-to-person transfers of up to Ksh100 to any customer and network from January 1, 2020.

There will also be no charges for transfers between mobile money wallets and bank accounts.

The Central Bank of Kenya (CBK) headquarters in Nairobi.
The Central Bank of Kenya (CBK) headquarters in Nairobi.

Savings and credit societies (Saccos) regulated by the Sacco Societies Regulatory Authority (SASRA) will be able to levy a charge for transfers between SACCO accounts and mobile money wallets.

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“CBK will oversee these charges in the context of the products that banks and PSPs offer to Saccos,” the Central Bank noted.

CBK also published principles on the pricing of mobile money services that PSPs will be expected to adhere to in development of their pricing structures.

According to CBK, the purpose of the principles is to facilitate the development of an efficient, safe and stable electronic payments ecosystem where the customer and public interests are adequately protected.

It tasks PSPs with considering customer centricity, transparency and disclosure, fairness and equity, choice and competition, affordability and responsibility in devising pricing structures.

“CBK has developed these principles as it embarks on the journey to anchor review of mobile money tariffs and charges based on the intended purpose and objectives above.

“Implementation will be carried out on a gradual basis. CBK will be periodically engaging to ensure alignment, identify and promote best practice in implementation,” the statement read in part.

Banks and mobile money providers had been locked in negotiations with CBK as an extension of the free transactions threatened their bottom lines.

The measure, however, also occasioned an uptick in use of mobile money services. The monthly volume of person to person transactions increased by 87 per cent between February and October.

In the same period, the volume of transactions below Ksh1,000 increased by 114 per cent and 2.8 million more customers started using mobile money services.

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Martin Siele is the Content Lead at Business Today.

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