On 16 March 2020, with Kenya’s first COVID-19 cases confirmed, President Uhuru Kenyatta made an unusual economic decision. Rather than stimulus packages, he called for something deceptively simple: make small digital transactions free. The CBK moved with rare speed, issuing a directive that removed all charges on mobile money transfers up to KES 1,000 from midnight — alongside raising the daily transaction limit from KES 70,000 to KES 150,000, and removing fees on transfers between bank accounts and mobile money wallets entirely.
It was presented as a temporary emergency measure. What unfolded over the following nine months was, in retrospect, one of the clearest demonstrations of what Kenyan financial infrastructure is capable of. And what it has been quietly leaving on the table ever since.
Source: CBK Review of Emergency Measures, June 2020 & December 2020 — via Tech-ish.com (June 2020) and Tech-ish.com (December 2020).
Part I: What Actually Happened in 2020
The CBK’s directive was simple: no charges for mobile money transactions up to KES 1,000, and no fees on transfers between banks and mobile money wallets. These measures ran from 16 March to 30 June 2020. On 24 June 2020, the CBK reviewed them and extended them through 31 December 2020, calling them “timely and highly effective.”
The data was unambiguous. Daily transaction volumes rose by an average of 9.4% within weeks. The monthly volume of P2P transactions surged from 162 million to 440 million. The value of transactions between payment service providers and banks leapt from 18 million transactions worth KES 157 billion a month to over 113 million transactions worth KES 800 billion. Over 2.8 million Kenyans who had never used mobile money joined during the period.
“This band accounts for over 80 percent of mobile money transactions and charges were eliminated, which has helped cushion the most vulnerable households.”
— CBK Review of Emergency Measures, June 2020
That line should still be keeping regulators up at night. The sub-KES 1,000 band wasn’t a niche corner of mobile money. It was, and remains, the overwhelming majority of it. Every mama mboga transaction. Every bodaboda fare. Every small school-fee instalment sent upcountry. These are the transactions that carry the highest fees as a percentage of value. And they constitute the economic heartbeat of most Kenyan households.
- 16 March 2020
CBK issues emergency directive effective from midnight: all mobile money transfers up to KES 1,000 zero-rated. Daily transaction limit raised from KES 70,000 to KES 150,000. Bank-to-mobile wallet transfers made free.
- 24 June 2020
CBK extends all measures through 31 December 2020, citing 1.6 million new users and a 9.4% daily transaction increase. Describes the measures as “timely and highly effective.”
- 17 December 2020
CBK announces measures will expire on 31 December 2020. By this point, 2.8 million new users have joined mobile money and monthly P2P volumes are up 87% since February.
- 1 January 2021
Charges reinstate — but Safaricom permanently reduces its tariffs by up to 45% for ~90% of transactions. Transfers below KES 100 remain free. Bank-to-mobile wallet transfers remain free as a lasting structural gain from the pandemic period.
- December 2021
The Kenya Bankers Association (KBA) begins lobbying CBK to reintroduce bank-to-mobile charges — despite banks being among the primary beneficiaries of the free-transfer period that had driven millions of new customer deposits into their accounts.
- 6 December 2022
CBK announces bank-to-mobile charges will return from 1 January 2023 at reduced rates. A High Court challenge briefly suspends the reintroduction; charges ultimately stand.
- Early 2023
Bank-to-mobile charges reinstate across all major lenders — KCB, Equity, Co-operative, NCBA, Absa, Standard Chartered, DTB, Stanbic. The lone exception: I&M Bank, which permanently absorbs the fees under its “Ni Sare Kabisa” proposition, becoming the first Kenyan bank to officially offer zero bank-to-mobile fees.
- 5 February 2026
Safaricom launches Ziidi Trader — live NSE stock trading from within the M-PESA app. No broker. No paperwork. A KES 4,500 trade costs KES 68.50 all-in. Not built by a bank. Not by a fintech startup. By a mobile network operator.
Part II: The Regressive Economics of Small Transaction Fees
There is a fundamental injustice baked into the current M-PESA tariff structure that rarely gets named plainly: the less money you are moving, the higher the percentage you pay to move it. Even after the post-2020 reductions, the structure remains deeply regressive. Sending KES 500 now costs KES 7, that’s 1.4% of the transaction. Send KES 100,000 and you pay KES 108, just 0.11%.
| Transaction Range (KES) | M-PESA Fee (KES) | Fee % of Min Amount | Fee % of Max Amount | Burden |
|---|---|---|---|---|
| 1 – 100 | Free | 0% | 0% | |
| 101 – 500 | KES 7 | 6.9% | 1.4% | |
| 501 – 1,000 | KES 13 | 2.6% | 1.3% | |
| 1,001 – 1,500 | KES 23 | 2.3% | 1.5% | |
| 1,501 – 2,500 | KES 33 | 2.2% | 1.3% | |
| 2,501 – 3,500 | KES 53 | 2.1% | 1.5% | |
| 3,501 – 5,000 | KES 57 | 1.6% | 1.1% | |
| 10,001 – 15,000 | KES 100 | 1.0% | 0.67% | |
| 20,001 – 35,000 | KES 108 | 0.54% | 0.31% | |
| 35,001 – 250,000 | KES 108 | 0.31% | 0.04% |
Source: Safaricom M-PESA Consumer Tariffs (current, last updated May 2024). Sending KES 200 costs KES 7 — an effective rate of 3.5%. Sending KES 200,000 costs KES 108 — just 0.05%. The regressive structure is not incidental: it is baked into the architecture of near-fixed transaction costs. The people paying the highest effective rates are those who can afford it least.
I&M Bank: “Ni Sare Kabisa” — What Happens When a Bank Actually Absorbs the Fee
When the CBK reinstated bank-to-mobile charges effective January 2023, every major Kenyan lender fell in line — KCB, Equity, Co-operative, NCBA, Absa, Standard Chartered, Diamond Trust Bank, Stanbic. Every one except I&M Bank.
Under its “Ni Sare Kabisa” (It Is Completely Free) proposition, I&M permanently absorbed bank-to-M-PESA and Airtel Money transfer fees for all personal account holders — saving customers between KES 10 and KES 65 per transfer. The bank cited rising cost-of-living pressures and direct customer feedback as the rationale. In April 2024, it extended the same zero-fee offer to sole proprietorships, acknowledging that small businesses contribute over 40% of GDP and are acutely sensitive to transaction costs.
What followed commercially makes the rest of the sector’s inaction look even harder to defend. Personal account numbers grew materially. The bank expanded aggressively under its iMara 3.0 strategy, targeting 100 branches nationally. Net profit rose 18% to KES 9.1 billion in the nine months to September 2024. This was not achieved despite waiving the fee — it was achieved partly because of what waiving the fee signalled and delivered in customer acquisition and loyalty.
Part III: The Irony: Banks Lobbied Against the Very Thing Growing Them
Here’s the detail that rarely gets discussed. During the free-transfer period, the primary institutional beneficiaries of millions of Kenyans shifting their financial lives onto mobile money were the banks themselves. Every shilling flowing from M-PESA into a bank account was a deposit. With free transfers, many Kenyans put their money in banks, to avoid costly mobile money fees. Banks should’ve thought of proper interoperability for things like Lipa na M-Pesa. Or more innovative ideas. To keep the customers.
And yet, by December 2021, the Kenya Bankers Association was lobbying CBK to reintroduce bank-to-mobile charges. They saw free transfers as a revenue drain rather than a way to acquire customers, and build products around them. The argument that banks were “losing millions” per month was in a weird way ignoring the millions being gained in deposits and account openings that those very transfers were enabling.
The CBK relented in December 2022, announcing the return of charges effective 1 January 2023. Kenya’s banking sector returned to treating transaction fees as revenue rather than as an opportunity for growth and innovation. The institutions best positioned to benefit from a more fluid financial system were the most aggressive in defending the friction.
Part IV: Banks Slacked. M-PESA Built.
While Kenya’s commercial banking sector spent the post-pandemic years fighting to reinstate meagre transfer fees, Safaricom was doing something else entirely. It was building.
The transformation of M-PESA from a simple send-money service into a full financial ecosystem did not happen in one moment. It happened in layers, each one quietly making the previous version of “banking” look more inadequate. First came Fuliza in January 2019 — an overdraft facility that lets M-PESA customers complete transactions even when their wallet balance falls short. No bank branch. No loan application. No waiting period. Fuliza effectively gave millions of Kenyans their first ever line of credit, disbursed and repaid entirely through mobile money.
Then came the infrastructure layer. In 2020, Pochi la Biashara launched — a separate business wallet sitting on a trader’s existing M-PESA number, allowing the mama mboga, the bodaboda operator, the kiosk owner to receive customer payments cleanly separated from personal funds. No till. No business account. No minimum balance or paperwork. For the first time, Kenya’s vast informal economy had a digital accounting tool built to its exact shape. Pochi later gained Taasi Pochi — working capital loans based on transaction history — and Fuliza Biashara extended the overdraft concept to businesses operating on M-PESA tills.
In June 2021, Safaricom launched the M-PESA Super App — and the ambition became impossible to miss. The app introduced a Mini Apps ecosystem: a marketplace of third-party services embedded directly within M-PESA. At launch, Kenyans could book SGR Madaraka Express tickets, purchase long-distance bus tickets via BuuPass, buy event tickets on Mtickets, access insurance through eBima, and order gas through Pro-Gas — all without leaving M-PESA. Then came Mali, a money market fund built into the app in partnership with Genghis Capital. Then M-PESA Global — Western Union transfers, PayPal, cross-border sends across East Africa, AliExpress payments, a GlobalPay virtual card for international shopping. The platform that started as a way to send money to a relative upcountry was now settling e-commerce in China and processing diaspora remittances from over 170 countries. By its 18th anniversary in March 2025, M-PESA was processing close to 100 million transactions daily, with infrastructure capable of handling 4,000 transactions per second. Financial inclusion in Kenya had reached 83.7% of adults, up from just 26.7% in 2006. A significant share of that journey happened because of M-PESA.
All of this, while banks were debating the ethics of a KES 10 transfer fee.
But M-PESA isn’t done.
In December 2024 came Ziidi MMF — a Money Market Fund accessible directly from the M-PESA app, minimum investment KES 100, zero transaction fees, no paperwork beyond your existing M-PESA registration. Within months of its January 2025 public launch it had attracted over KES 7.5 billion in assets. Kenya has had unit trust funds for decades. The mobile-first, zero-paperwork version took until 2024 — and it did not come from a bank.
Then, on 5 February 2026, came Ziidi Trader.
Ziidi Trader: Buy & Sell NSE Shares From Your M-PESA App. No Broker. No Paperwork. Live Now.
Ziidi Trader is the second pillar of Safaricom’s Ziidi wealth brand. The first — Ziidi MMF, officially launched in January 2025 — had already accumulated over KES 7.5 billion in assets by March 2025 using the same frictionless, opt-in model. Ziidi Trader moves the needle further: from passive savings (earn interest on T-Bills) to active investing (own shares on the NSE), all within one app already on millions of phones.
Kenya has had an NSE since 1954. Mobile money since 2007. Unit trust funds for decades. Frictionless mobile stock trading with low transaction costs and instant onboarding took until February 2026 — and came from a mobile network operator, not a bank, not a fintech startup, not a capital markets regulator.
Here’s the full M-Pesa Timeline from 2020 to 2026
Part V: The Case for Going Back — and Going Further
We already ran this experiment. We ran it nationally, in the middle of a pandemic, with real money, real businesses, and real households under real pressure, and it worked. Every single metric went in the right direction.
If we go back, there’s no question of whether it’ll be sustainable.
When transactions below KES 1,000 were zero-rated in 2020, Safaricom absorbed real losses. But here is what has changed since then: M-PESA is no longer a transfer service that charges per transaction. It is a financial ecosystem with Fuliza generating overdraft revenue, Pochi la Biashara serving the informal economy, a Super App hosting a mini apps marketplace, a Money Market Fund with KES 7.5 billion in assets, and a live stock trading platform processing NSE trades. The revenue base has diversified enormously. The argument that removing small-transfer fees would break the business model made more sense in 2020 than it does today.
Banks should be making the same move. And for entirely selfish reasons. The last time transfers between banks and mobile money wallets were free, millions of Kenyans moved cash from their bank accounts to their M-PESA wallets for the first time. Deposits grew. Customer numbers grew. If banks are serious about competing in a world where M-PESA now offers savings, credit, investments, and stock trading, the minimum entry point is removing the friction that keeps ordinary Kenyans from using them.
The threshold should not be the current KES 100. That is not generous, it barely covers much nowadays. The right number is KES 500 at minimum. KES 1,000, as it was in 2020, would be better. More people transact digitally. More businesses accept mobile money. More of the informal economy becomes visible and legible. More of it becomes taxable in ways that actually work.
And if you follow that chain to its end, you get something bigger than cheaper M-PESA. You get a more integrated economy. One where the cost of participating in the financial system is not a barrier that the poorest pay most dearly to cross.
Conclusion: Time to let everyone in
We’ve come a long way with Mobile Money in Kenya. From simple SMS for money transfer and withdrawals, to the whole ecosystem living in your phone. Allowing you to now buy shares from the same app you use to pay for matatu fare.
But there is a version of this story that does not sit right. Because alongside all of that ambition and innovation, we are still charging a mama mboga KES 7 to send KES 200 to her supplier. A 3.5% fee on a transaction she makes every single day. The person sending KES 200,000 pays just 0.05%.
We already know how to fix it. 2020 was proof.
Remove the charges on transfers below KES 1,000. Make it permanent this time. Let M-PESA’s expanded revenue base — Fuliza, Ziidi, Pochi, the Super App ecosystem — carry what the small-transfer fees used to. Let banks, finally, champion this instead of fighting it, because the last time it happened their customer numbers grew. And then watch what follows: more trade, more digital payments, more economic activity moving through formal channels, more of Kenya’s real economy becoming visible.
This is very true. Remove and lower the transaction fees. There are more ways that the telcos and banks can make more money whole handling people’s money than just extorting clients through bloated transaction cost.