Kenya Aims to Revitalize Mobile Money with Fee Cuts
Kenya’s Central Bank (CBK) is stepping in to lower mobile money transaction fees in an effort to reignite growth in the sector. Recognizing the crucial role mobile money plays in the Kenyan economy, the CBK believes that current fees are hindering further adoption and innovation, particularly among low-income users. The goal is to reduce the average transaction cost from $0.18 in 2024 to $0.078 by 2028 as part of its broader National Financial Inclusion Strategy.
Stagnating Growth and High Costs
Despite impressive figures – processing $67.3 billion in transactions in 2024 – Kenya’s mobile money growth has stalled. The CBK attributes this stagnation to the high cost of transfers, which discourages users from exploring other financial services beyond basic transactions. The regulator fears that these fees are not only excluding a significant portion of the population from the digital economy but also stifling innovation within the mobile money space. Similar measures were taken in 2020, when mobile money operators, including Safaricom’s M-PESA, temporarily waived fees for transfers under $7.73 to encourage e-payment adoption.
By actively pushing for lower transaction fees, the CBK aims to unlock the next phase of financial inclusion and foster a more vibrant and accessible digital economy for all Kenyans. The success of this initiative could serve as a model for other African nations looking to maximize the potential of mobile money platforms.
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