Central Bank of Kenya reviews its emergency measures to encourage continued use of mobile money

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When President Uhuru Kenyatta appeared to give his first address regarding the COVID-19 pandemic in the country, he directed telco companies to explore ways of deepening mobile money usage to reduce the risk of infection through the handling of physical money. The President asked the banks and other mobile money providers to reduce the transaction costs and facilitate easy use of cashless modes of payment as part of the virus containment efforts.

Former Safaricom’s CEO Michael Joseph confirmed that the telco was directed to reduce the cost of using its mobile money transfer service, MPESA, during the period. In a statement issued on March 17, 2020, the company waived the sending charges of all person-to-person transactions below KSh1,000 for a period of 90 days.

Following the nearing lapse of the 90-day waiver, the Central Bank of Kenya (CBK) has today issued a press release extending the measures to facilitate continued use of mobile money transactions instead of cash during this period of COVID-19 global health pandemic. The regulator says a significant increase in the use of mobile money channels by individuals in both value and number of transactions was noted, most of which were low-value transactions of Ksh.1,000 or less.

Central Bank of Kenya said in a statement that more than 1.6 million additional customers are now using mobile money channels. Business-related transactions have however declined marginally. CBK notes that these measures were timely and highly effective in facilitating official and personal transfers at a time of great need. Increased wallet and transaction limits that were also announced have led to increased usage at higher amounts and greater convenience.

CBK has announced that the wallet and transaction limits that were announced on March 16, 2020, will remain in force. The regulator has extended the following emergency measures from July 1, 2020, until December 31, 2020.

· There will be no charge for mobile money transactions of up to Ksh.1,000.

· The current tariff for transactions above Ksh.70,000 will remain.

· There will be no charge by Payment Service Providers (PSPs) and commercial banks for transfers between mobile money wallets and bank accounts.

Read: A sigh of relief as Safaricom waives MPESA charges in efforts to tackle coronavirus pandemic.

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