The Central Bank of Kenya (CBK) is considering capping the cost of person-to-person mobile money transfers in a policy proposal that leaves Safaricom's M-Pesa and Airtel Money staring at lower profit margins.
The Kenya National Financial Inclusion Strategy 2025-2028 seeks to reduce costs for users of mobile money from a baseline of Sh23 –the average cost per mobile money transaction in 2024— to a mean of Sh10 by 2028.
The charges on certain mobile money transactions can be as high as 6.9 percent of the amount transferred, far outpacing what banks charge their retail customers to move cash.
The move will, on the other hand, build pressure on telecoms operators’ revenue from mobile money services.
Safaricom’s M-Pesa has an industry dominance on mobile money services, with more than 90 percent of transactions processed through the platform.
The CBK is expected to work alongside telecoms operators and Parliament to deliver more affordable digital financial services (DFS) while promoting transparent pricing.
According to the apex bank, the use of mobile money services has plateaued in recent years due to a combination of factors, including high transaction fees.
“Recent data shows signs of plateauing growth in mobile money access and usage. Most users still rely primarily on basic services like person-to-person transfers, with limited uptake of advanced offerings such as digital credit, insurance, or savings,” the CBK says.
“This is attributed to issues such as limited interoperability, high transaction costs, low financial literacy, and product designs that do not reflect the realities of underserved groups.”
The CBK has, until now, not put universal caps on mobile money service charges but has developed principles guiding their application.
The regulator first controlled mobile money charges in March 2020, aiming to reduce the use of cash at the onset of the Covid-19 pandemic.
Costs on mobile money transactions up to Sh1,000 were waived between March 16, 2020, and December 31, 2022, while payment service providers (PSPs) and commercial banks eliminated charges for transfers between mobile money wallets and bank accounts.
The charges were reintroduced in 2023 but at significantly lower rates than those applied before the pandemic.
The fee waiver was credited with growing the number of Kenyans actively using mobile money services by over 6.2 million.
The monthly volume and value of person-to-person transactions increased from 162 million worth Sh234 billion to 440 million worth Sh399 billion.
The pricing of mobile money services is currently based on customer centricity, transparency and disclosure, fairness and equity, choice and competition, and affordability, among other principles.
“Provision and pricing of services in a manner that is proportional to low-value and other ‘public good’ related payments. Pricing policies need to strike a balance between short-term commercial targets and long-term sustainable growth,” the CBK notes.
Safaricom’s M-Pesa charges a maximum of Sh108 for person-to-person transfers between Sh20,001 and Sh250,000.
Transfers to other registered mobile money users are also charged at the same rate.
Airtel Money, meanwhile, has waived all fees for on-network money transfers but charges between Sh6 and Sh105 for transfers to other networks.
Lower and capped charges on mobile money services could dent revenues from the platforms, most of which are sourced from P2P payments.
Data shows that 39.1 percent of M-Pesa revenues across 12 months to the end of March 2025 or Sh62.9 billion came from personal cash transfers.
M-Pesa revenues totalled Sh161.1 billion, with other transaction types being withdrawals, business payments, global payments, and financial services.
The CBK has termed mobile money as the single most transformative tool for financial inclusion, with the rate of involvement growing from 27 percent in 2006 to 82.3 percent of the adult population as of 2024.
The advent of mobile money in Kenya was in 2007 when M-Pesa began operations.
“It has enabled low-income groups, especially women, youth, and rural populations, to access essential financial services, including payments, savings, and credit, often without needing a traditional bank account,” the CBK says.
“Mobile money has also played a significant role in supporting micro and small enterprises, expanding access to remittances, and enhancing household resilience.”
As of the end of June 2025, mobile money subscriptions were at 47.7 million, translating to a penetration rate of 91 percent compared to 77.3 percent reported a year prior, according to data from the Communications Authority of Kenya (CA).
The CA said the increase had been mainly driven by the growing demand to close the gaps on financial inclusion, especially among the unbanked.
Data from the 2024 FinAccess Survey shows that mobile money leads in usage ahead of banks, informal groups, insurance, and savings and credit co-operative societies (saccos).
The expansion in usage has, however, slowed down, having grown from 19.9 percent in 2019 to 22.2 percent in 2021 before the rate of growth slowed to 23.2 percent in 2024.
“By adult population, mobile money and banks serve the largest number of consumers, reaching 23.2 million and 14.8 million users respectively. This dominance reflects mobile money’s intermediary role as the primary digital financial service for Kenyans, followed by banks with steady growth,” the FinAccess Survey notes.
