This archive report was first published on 26 June 2020.
On June 26, 2020, the Central Bank of Kenya (CBK) extended free mobile money transaction fees for another six months, sparking a backlash from telecommunication companies and banks.
The move, which was made without consulting the firms, has left them facing billions of shillings in losses. Safaricom, the largest mobile network operator in Kenya, had earlier estimated that it would lose an average of Sh1.8 billion monthly since mid-March due to the free M-Pesa service.
Executives at the firms, who wished to remain anonymous, argued that CBK should have extended the free service for a shorter period or introduced discounts on the transfer charges to cushion them from losses.
"We were not consulted given the billions we stand to lose," said a top Safaricom executive.
CBK introduced the measures to encourage cashless payments on mobile phones as a way to contain the spread of the COVID-19 virus in the country. Under the directive, mobile phone money transaction fees under Sh1,000 are free, with banks removing charges for customers moving cash between their mobile wallets and bank accounts.
The Kenya Bankers Association (KBA) chairman, Joshua Oigara, said that the bankers will meet with CBK Governor Patrick Njoroge on Friday to discuss the matter.
