Mobile money subscribers will from January 1, 2021 be charged for transfers above Kshs 100 after the emergency measures introduced by the Central Bank of Kenya (CBK) to facilitate increased use of mobile money transactions instead of cash, in the context of the COVID-19, expire on December 31, 2020.
A statement by CBK, issued on December 17, 2020, says that Payment Service Providers (PSPs) will introduce revised pricing structures from January 1, 2021, even though there will be no charges for transfers between mobile money wallets and bank accounts.
“On March 16, 2020, the Central Bank of Kenya (CBK) announced emergency measures to facilitate increased use of mobile money transactions instead of cash, in the context of the COVID-19 (Coronavirus) pandemic. These measures ran until June 30, 2020, and were extended until December 31, 2020, after a review,” said the CBK in the press release.
“A significant increase of mobile money usage has been noted over the period the measures have been in place, demonstrating that they were timely and effective. For instance, the monthly volume of person-to-person transactions increased by 87 percent between February and October 2020. Over this period, the volume of transactions below Kshs 1,000 increased by 114 percent, while 2.8 million additional customers are using mobile money. Business-related transactions also recorded significant growth over the same period.”
CBK has reassessed the emergency measures with the objective of consolidating the gains made so far and also facilitate a transition towards sustainable growth of the mobile money ecosystem.
To facilitate the integration of Savings and Credit Societies (SACCOs) with the mobile money ecosystem, SACCOs regulated by the Sacco Societies Regulatory Authority (SASRA) are allowed to levy a charge for transfers between SACCO accounts and mobile money wallets. CBK will oversee these charges in the context of the products that
banks and PSPs offer to SACCOs.
Going forward, PSPs are required to propose pricing structures that reflect the “Pricing Principles” that CBK has introduced. The Principles aim to support the development of an efficient, safe and stable payments and mobile money ecosystem where the customer and public interests are adequately protected. It is noted that the wallet and transactions limits that were announced on March 16, 2020, will remain in force as was communicated earlier. CBK will continue to monitor developments in the payments ecosystem and take any necessary actions.
The Principles aim to among other things: increase access, usage and equity in provision of digital payments services; improve transparency and disclosure in provision of digital payments services; to foster a business culture underpinned by the primacy of customer’s interest; and to promote competitiveness and sustainable growth of digital payment services.
The Principles call on service providers to give adequate consideration of a customer’s needs, preferences and circumstances in the design, pricing and roll out of mobile money services. The primacy of the customer interest must be evident in how services are developed, priced and marketed.
They also call for a clear description of charges, fees and charges that a customer will incur at the point of sale, are during use of the service. Terms and conditions should be in simple and legible language. Conflicts of interest ought to be disclosed, where there is a risk this will lead to mis-selling of inappropriate services to obtain commissions or fees.
Through the Pricing Principles, CBK also call for the provision and pricing of mobile money services in a manner that is proportional to the service provided and benefit obtained. Pricing policies and practices should pay due regard to the profile of customers and purpose of the underlying payment, according to the statement.