This archive report was first published on 26 June 2020.
Published on June 26, 2020, the Central Bank of Kenya's (CBK) decision to extend the waiver on mobile transaction fees has sparked a heated debate in the financial sector. The move, aimed at cushioning Kenyans against the financial effects of Covid-19 and promoting cashless transactions, has been met with resistance from banks and telecommunication providers.
According to insider sources, the extension was done without the input of the affected parties, including Safaricom and Airtel, which have seen a significant decline in revenue due to the waiver. Over 175,000 M-Pesa operators have been negatively affected, with many finding themselves idle as people opt for cashless transactions.
CBK Governor Patrick Njoroge had initially announced the exemption on March 16, which waived charges for money transactions up to Sh1,000. The move led to an increase in low-value transactions, with eight in 10 mobile transactions being below Sh1,000. As a result, the number of customers transacting through mobile phones increased by 1.6 million, according to a CBK statement.
