High Court suspends bank to M-Pesa transaction charges

mpesa mobile money transaction

A client using mobile phone to make a transaction. The Central Bank of Kenya (CBK) had in December last year announced the reinstatement of bank to mobile money wallet transfer charges. 

Photo credit: File | Nation Media Group

The High Court has ordered Safaricom and the central bank to halt re-introduction of charges on transactions made between mobile money wallets and lenders pending determination of a suit involving financial consumer rights.

The order comes after a Kenyan, Moses Wafula, filed an application challenging the reinstatement of the charges after they were suspended in 2020 due to Covid-19. He claims that the charges should not be passed to consumers.

While asking the court to halt the charges, Mr Wafula argued that should the court find that the M-Pesa charges are illegal, more funds from members of the public will have been lost and it may be difficult to ask banks to refund the same.

He contends that his rights and those of other Kenyans have been violated, infringed and continues to be threatened by Safaricom and the government in view of the directive issued by the Central Bank of Kenya (CBK).

According to him, charges incurred in transaction services are to be paid by Safaricom’s primary clients such as banks and not by consumers. 

"The petition pending determination illustrates that the engagement between Safaricom and its Mpesa Paybill clients (such as banks, government agencies, Kenya Power, DSTV, betting companies, mobile money companies, and other institutions) is a bipartite business engagement between Safaricom as the M-Pesa paybill service provider and their M-Pesa paybill primary clients being the service recipients," he says.

The case will be mentioned on January 23, 2023.

Relief for banks

The new charges were to take effect on January 1 this year. 

CBK had in December last year announced the reinstatement of the charges in a move that would have offered relief for commercial banks that have decried the regulator’s reluctance to reinstate the fees.

However, the regulator said the new charges will be lower than the previous charges that were applied before the waiver. CBK said maximum charges for transfers from bank accounts to mobile money wallets will be reduced by up to 61 per cent and mobile money wallet to bank account by up to 47 per cent. 

The charges were waived on March 16, 2020, as part of the emergency measures to facilitate the use of mobile money at the height of the Covid-19 pandemic.


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