Banks and Telecommunications companies slow on implementing fees directive

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Commercial banks and telecommunications companies are lagging behind in implementing a directive to disclose all fees on mobile money transactions to the customers. According to the Competition Authority of Kenya (CAK), only 8 institutions have complied with the directive.

Airtel is the only one of four Telecommunications Company which has implemented the directive with Safaricom, Orange and Equitel lagging behind. Among Kenya’s 7 tier one banks, Co-operative bank is the only bank which has complied. Other financial providers who have heed the call include Faulu Kenya, Bank of Africa, Family Bank, NIC Bank, Prime Bank and Mobikash. End of 2016 was the deadline for compliance with technical hold-ups and bureaucracy being blamed for the delay in implementation. CAK is engaging with the companies individually to get them on board with a plan for compliance that does not go beyond June 2017.

 

“We took into account the complexities of some of the systems and are approaching this issue on a case to case basis,” said Boniface Kamiti, CAK head of consumer protection. Safaricom, one of the companies yet to adhere to the rule- asked for an extension until June 2017 to comply.

 

According to the directive issued by the Authority, firms are required to make fundamental changes on how they provide mobile money services through mobile applications, USSD, and Sim-toolkits. This is to cushion customers from changes in transaction fees and the addition of other fees without notice to the customers. This also ends overreliance on fliers and posters to get information on transaction costs.

 

The directive is not the only effort aimed at controlling how banks and telecommunication firms handle transaction fees. An amendment to the Kenya Information Communications Act in January made it mandatory for customers to be notified of the cost of premium rate services before the use of such services.

 

Nine months figures leading up to September 2016 saw 2.46trillion shillings transacted on mobile money platforms with Safaricom taking the larger share. It is this success that has guided banks towards the provision of mobile money services with Equity Bank launching its own Equitel platform.Other Banks are now angling for a larger share of the market after Central Bank approved a mobile cash transfer system for all banks. The Kenya Interbank Transaction Switch is expected to give both Safaricom’s Mpesa and Equity’s Equitel a run for their money.

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Melissa Daniels
Article Categories:
BANKING · MOBILE MONEY