The Nation is reporting that a Kenyan High Court has ordered Safaricom and the Central Bank of Kenya to halt the reinstatement of transactions charges when moving money from Banks to M-Pesa, Airtel Money and other Mobile Money Wallets.

This is thanks to one Mr Moses Wafula who filed challenged reinstatement of the charges.

The petitioner argued to the court, according to the Nation, that it makes sense to suspend the charges before the matter is decided, as it is better that way, than refunding customers for all transactions that would be carried out if the matter is decided and found to be illegal.

Since January 1st 2023, banks and mobile money wallets – including M-Pesa by Safaricom, and Airtel Money – have been charging customers fees when moving money between accounts. We have an article breaking down charges from different banks to mobile money wallets.

What has came up as not being quite clear is the charges from M-Pesa to Banks. We thought normal Paybill charges would apply, but we’ve noticed that’s not the case with certain banks.

Why the case is important:

The idea of paying high fees moving money makes no sense to many Kenyans, not in 2023. It affects how people plan their lives, and affects how businesses ask for payment. It also hinders growth in the mobile money sector. You can’t have charges when the previous mediums of doing business – physical cash – charged no fees. You can’t reintroduce charges when you already suspended them.

We have had close to three years of doing transactions without any charges. Everything in the economy has worked. More people have switched to the digital economy. More money than ever before has been moved. And the telcos and banks have still made great profits. The re-introduction of these fees is a greedy move, to say the least. A move that stands to bring more harm than good to the economy.

The case, should it be decided that transaction fees are illegal, will steer Kenya into a new frontier when it comes to how we view mobile money vs physical cash vs what we store in banks. It will mean a lot more gains to an economy that’s runs on M-Pesa; a lot more businesses will be able to freely accept payments. People will no longer be charged fees when moving their own cash to their other accounts, it makes no sense.

What comes next?

The big question I think everyone is waiting to see is this: Will Banks and Mobile Money companies actually suspend the charges? Will they do it as immediately as they on January 1st?

Also, what will be their arguments supporting the resumption of the charges? Haven’t they managed to operate very efficiently when the charges were scrapped? Haven’t they gained more users than ever before?

What do they stand to gain from them charges, apart from some more profits? And, what’s the effect of such charges on the economy, and on the citizens?

Let’s wait and see.


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