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Covid-19 was reportedly a boost for the use of mobile money in Kenya after the Central Bank of Kenya (CBK) allowed free mobile banking and M-Pesa transactions until the end of the year. However, Safaricom is apparently not enthusiastic about the possibility of this ruling extending until 2021.
According to Kenyan media, Safaricom and the country’s banks want the CBK to involve them in any decision on extending the free transaction rules beyond the end of the year.
It may have seemed like good news for all players when CBK announced the removal of fees on M-Pesa transactions of up to Sh1,000 ($ 9.15) from March 16 to June 30, and then extended the ruling. until the end of the year. After all, this should encourage new customers to embrace cashless payment while reducing the health risks associated with handling money. Bank-to-mobile phone transactions also saw their charges dropped.
But Safaricom and the banks have apparently lost billions of shillings on the free service. And as Covid-19 is not yet under control (recently there has been an increase in Covid-19 cases in Kenya), the CBK may feel compelled to extend the scheme, a prospect that clearly worries payment facilitators and mobile banking. . To make matters worse, astute clients have reportedly been splitting high-value M-Pesa transfers into multiple transactions to avoid paying fees.
This is not the only challenge the Kenyan mobile money innovator has faced recently. As we reported yesterday, Safaricom is expected to downgrade its offer for an operating license in Ethiopia following the revelation that mobile money offerings will be the exclusive domain of local financial institutions.
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