CBK extends waiver on mobile money transfer fees below Kshs 1,000 till end of year

The Central Bank of Kenya (CBK) has announced that measures announced on March 16, 2020 to help reduce the risk of transmission of Covid-19 by handling banknotes and to also reduce the overall use of cash in the economy have now been extended to the end of the year, that December 31, 2020. The measures were initially meant to be in force till June 30, 2020, about a week from now.

The extension means that mobile network operators (or MNOs) will still levy no transfer charges for mobile money transactions up to Kshs 1,000; while the transaction limit for mobile money will still remain Kshs 150,000 with the daily limit for mobile money transactions standing at Kshs 300,000. The mobile money wallet limit will also remain at its current cap of Kshs 300,000. Until news year’s eve, the monthly total limit for mobile money transactions will be Kshs 150,000.

Payment service providers (or PSPs) and commercial banks will also levy no charges for transfers between mobile money wallets and bank accounts as part of the extension.

In a media statement, CBK stated that it has reviewed the implementation of the measures introduced towards the end of March and noted “a significant increase in the use of mobile money channels by individuals in both value and number of transactions.”

“Most of the increase was in low-value transactions of Kshs 1,000 or less – this band accounts for over 80 percent of mobile money transactions and charges were eliminated, which has helped cushion the most vulnerable households. Moreover, more than 1.6 million additional customers are now using mobile money channels. However, business-related transactions have declined marginally,” stated the country’s financial services industry regulator, adding that “the measures were timely and highly effective in facilitating official and personal transfers at a time of great need.”

Having assessed that the increased wallet and transactions limits that were also announced have led to increased usage at higher amounts and greater convenience, CBK has therefore determined that the wallet and transactions limits that were announced on March 16, 2020, will remain in force.

Additionally, the following emergency measures are extended and will remain in place from July 1, 2020 until December 31, 2020: there will be no charges for mobile money transactions of up to Kshs 1,000; the current tariff for transactions above Kshs 70,000 will remain; there will be no charge by Payment Service Providers (PSPs) and commercial banks for transfers between mobile money wallets and bank accounts. CBK will also continue to closely monitor the implementation of the emergency measures.

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