Equity Group has asked the Central Bank of Kenya(CBK) to reinstate charges on transfers of money from bank accounts to mobile money wallets.
Banks and the CBK have been holding closed door meetings over the resumption of these transaction charges with CBK insisting that the COVID-19 pandemic is yet to slow down.
Equity Group CEO, James Mwangi, says reinstating the fees frozen almost two years ago will level the playing field between Banks, telcos operating in the financial space and micro lenders.
Equity Group and other lenders have witnessed a fall in fees and commissions from such transactions and eye the end of the freeze to boost up non-interest income.
“We have seen the central bank has reinstated the charges of microfinance institutions and for telecom sector. We hope the transaction mobile fees for banks are also going to be considered for reinstatement so that we can have a level playing field,” Mwangi said.
The reliefs on mobile phone payments were introduced from March 16 2021 to encourage cashless payments on mobile phones as part of efforts to contain the spread of the coronavirus.
They included a doubling of the daily transaction limits to KSh300,000 after the first case of Covid-19 was reported.
Equity Group and other lenders are already losing millions per month due to the free transfers between them and wallets such as M-Pesa given that they used to charge fees ranging from KSh30 to KSh197 before the waivers were introduced.
At the end of 2020, CBK rejected bankers’ push to reinstate fees on the transfer of cash between accounts and mobile phone wallets, even as it ended free M-Pesa transactions of up to KSh1,000.
CBK in April announced the resumption of charges on bank to mobile wallets that are linked to the Sacco sector, prompting lenders such as Co-operative Bank to roll out discounted rates.
Bankers reckon that the waiver of fees on bank-to-mobile phone transactions triggered an increase in deposits as small businesses embraced the digital channel and cut branch visits for cash deposits.
CBK also said the free M-Pesa service had led to increased use of the mobile money transfer and added users to the telco’s cash service.