This archive report was first published on 25 June 2020.
Published on June 25, 2020, the Central Bank of Kenya (CBK) has extended its directive to Payment Service Providers (PSPs) to keep mobile money transactions below Ksh1,000 free of charge, in a bid to encourage Kenyans to use digital money over hard currency.
According to a statement by the CBK, the extension is aimed at dissuading Kenyans from using cash in favor of digital money, particularly in the context of the COVID-19 pandemic.
The CBK also announced that tariffs for transactions above Ksh70,000 will remain in place, while the limit for mobile money wallets will be Ksh300,000.
Furthermore, the CBK stated that PSPs and banks will not charge transfers between mobile money wallets and bank accounts.
“Following the March 16 announcement by the Central Bank of Kenya (CBK) of measures to facilitate increased use of mobile money transactions instead of cash, in the context of the COVID-19 pandemic, CBK has reviewed their implementation,” read the statement.
CBK noted that a significant increase in the use of mobile money channels by individuals, both in value and number of transactions, was observed. Most of the increase was in low-value transactions of Ksh1,000 or less, accounting for 80% of mobile money transactions with charges eliminated.
CBK stated that this has helped cushion most vulnerable households, with more than 1.6 million additional customers now using mobile money channels. However, business-related transactions have declined marginally.
The monetary policy regulator says it will continue to monitor the measures.
Statistics show that Kenyans moved Ksh564 million per day via mobile money channels between late April and early May, as they sought to make most of the measures introduced by CBK.
