Bank-to-Mobile Money Transfer Charges Stopped

Bank-to-Mobile Money Transfer Charges Stopped

The High Court has suspended the reintroduction of charges for transactions between mobile money wallets and bank accounts.

The reintroduction was to take effect from January 2023 but the court ordered Safaricom and the Central Bank of Kenya to the reintroduction of the charges.

The transaction charges were waived in March 2020 as part of Covid-19 emergency measures to help ease the cost of living.

However, CBK in a press release issued on December 6 said the new charges that were to take effect would be lower than the previous charges before the emergency measure.

“The revised maximum charges for transfers from bank accounts to mobile money wallets will be reduced by on average up to 61 per cent, and mobile money wallet to bank account by on average up to 47 per cent,” CBK said.

Milimani law court Judge Mugure Thande issued the order following an application filed by one Moses Wafula.

The order by Justice Thande will be in force until January 23 when the matter will be mentioned for further directions.

In the meantime, she said responses to the motion filed by Wafula should be done by January 20.

The petition relates to financial consumer rights with a focus on the area of payment services provided by Safaricom in the form of Lipa Na M-Pesa pay bill service.

Wafula argues that since M-Pesa pay bill services is an outsourced service to Safaricom, the latter has no authority to charge members of the public for a service offered to its contracting service recipients including banks.

“If the Banks continue riding on this M-Pesa pay bill infrastructure and the courts ultimately find the M-Pesa pay bill platform to be in contravention of the constitution, the impact will be higher; more funds from the public would have been lost and it may be a lot more difficult to task the banks to refund such funds collected from the public,” Wafula’s petition reads.

Wafula also reveals that he had filed an application on July 3, 2021, seeking to add Central Bank of Kenya, the CS for Treasury and the Competition Authority of Kenya as respondents in view of their regulatory duties over Safaricom’s M-PESA business.

However, the said application is yet to be ruled on. It has been pending since May 12 last year ‘due to the transfer of Justice Anthony Mrima.’

The three parties are currently listed as ‘intended respondents’ in the latest application before the court. Other respondents named are Safaricom and Attorney General.