Telecoms companies Safaricom and Airtel are charging more for high-value mobile-to-bank transfers than what it costs for withdrawals from bank accounts to mobile wallets.
M-Pesa and Airtel Money charges range from Sh0 to Sh105 compared to the bank rates which are from Sh0 to Sh81 for transfers of up to Sh150,000.
Telcos are the only parties charging for moving money from mobile wallets to bank accounts, with the firms having more chargeable bands that allow them to set higher fees for amounts exceeding Sh30,000.
The maximum charge on bank-to-mobile transfers ranges from Sh65 to Sh81, excluding taxes for sending between Sh20,000 and Sh150,000, according to tariffs by 10 banks including KCB, Equity and NCBA.
Safaricom's M-Pesa has fees ranging from Sh87 to Sh105 across three bands for transferring Sh30,001 to Sh150,000 to a bank account.
It costs Sh87, Sh96 and Sh105 to move Sh30,000, Sh40,000 and Sh150,000 respectively from M-Pesa to a bank account.
Transferring similar sums from bank accounts to M-Pesa attracts charges ranging from Sh65 to Sh81 excluding taxes.
Airtel Money has not disclosed its tariffs but they closely track the rates on M-Pesa.
Moving Sh9,500 from Airtel Money to a bank account, for instance, costs Sh45 while a similar transaction on M-Pesa will attract Sh46.
The mobile money operators collect more fees from transactions originating from their platforms but also record significant revenues from bank transfers terminating in their wallets.
Airtel collects a fee of between Sh5 and Sh10 on bank-to-mobile deals while Safaricom has a more diverse tariff ranging from Sh4 to Sh12.
Across all routes, customers pay nothing for Sh100 or less.
Banks and telecom operators were required to slash their charges by up to 61 percent as part of their agreement with the Central Bank of Kenya (CBK) that allowed them to reinstate fees on transactions at the beginning of this year.
The fees were suspended in March 2020 to encourage the growth of cashless transactions besides offering financial relief to households in the wake of the Covid-19 pandemic.
While the charges have been cut substantially, the impact is expected to be mitigated by an explosion of digital cash transfers.
The number of Kenyans actively using mobile money increased by more than 6.2 million between March 2020 and October 2022, according to CBK.
The monthly volume and value of person-to-person transactions increased from 162 million worth Sh234 billion to 440 million of Sh399 billion, an increase of 171 percent and 71 percent, respectively.
“The monthly volume and value of transactions between payment service providers and banks increased from 18 million transactions worth about Sh157 billion, to over 113 million transactions worth Sh800 billion, an increase of 527 percent and 410 percent, respectively,” the CBK said.
