This archive report was first published on 24 June 2020.
On June 24th, 2020, the Central Bank of Kenya announced that measures to reduce the use of physical cash in response to the Coronavirus pandemic will remain in place until December 31st 2020.
The measures, which were introduced earlier this year, have been effective and timely, facilitating personal transfers at a time of great need. According to the Central Bank, there has been a significant rise in both the number and value of transactions, with the most increase being in low-value transactions below KES. 1000.
As a result, there are now over 1.6 million more customers using mobile money. However, business-related transactions have declined marginally.
The emergency measures that will remain in force through to December 31st 2020 include:
- No charge for mobile money transactions up to KES. 1,000
- Tariffs for transactions above KES. 70,000 will remain in place
- Amounts wallets can hold and transaction limits will also remain in place, with a daily limit of KES. 300,000 on M-Pesa
- Transfers between mobile money accounts and bank wallets will remain free
It remains unclear how mobile money companies will react to this extension, particularly for M-Pesa, the biggest player. With the scrapping of fees for transactions below KES. 1,000, a big player like Safaricom is losing lots of cash it could be making.
It is also unclear whether after December Kenyans will ever consider switching back to the old days where transactions were charged, and accounts couldn’t hold more than KES. 140,000.
