Central Bank of Kenya (CBK) has refused to cap the Ksh1,000 and below free M-Pesa transactions per user to five per day.
Safaricom had petitioned to the CBK to cap free transactions between two numbers to five, arguing that customers were splitting high-value money transfers of as high as Ksh60,000 to transactions of below Ksh1,000, allowing them to enjoy a free services at the expense of the telco.
Safaricom also wanted CBK to reduce the free transaction from bank accounts from Ksh1,000 to Ksh500.
Safaricom estimates that it had been losing approximately Ksh1.7 billion worth of revenue every month between March and June, amounting to Ksh5.1 billion in three months.
On June 24, CBK extended the free mobile money transactions for Ksh1,000 and below to cushion Kenyans during the Covid-19 pandemic period.
Data from CBK shows an 83 percent growth of daily average mobile phone money transactions of less than Ksh1,000 to Ksh1.98 billion daily between April 20 and May 10, compared to the days before March 16, just four days after Kenya announced its first positive Covid-19 case.
However, there was an 18.4 percent decline in mobile transactions of amounts more than Ksh1,000, dropping to Ksh5.6 billion daily.
“CBK notes that these measures were timely and highly effective in facilitating official and personal transfers at a time of great need. Further, CBK assesses that the increased wallet and transactions limits that were also announced have led to increased usage at higher amounts and greater convenience,” CBK said in a statement.
CBK said that there are an additional 1.6 million customers using mobile money channel, although business related transactions have reduced considerably.
“Against this backdrop, and pursuant to Regulation 43 (2) of the National Payment System Regulations, 2014, CBK has determined that the wallet and transaction limits that were announced on March 16, 2020, will remain in force” added CBK.