High Court orders suspension of bank to mobile transaction charges
Bank to mobile transaction charges that took effect January 2023 following CBK directive suspended
Bank to mobile transaction charges that took effect January 2023 following CBK directive suspended.
The High Court has ordered Safaricom and the central bank to halt the re-introduction of charges on transactions made between mobile money wallets and lenders pending the determination of a suit involving financial consumer rights.
The order comes after a Kenyan, Mr. 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.
In light of the directive given by the Central Bank of Kenya, he claims that Safaricom and the government have violated, infringed, and are now threatening his rights and those of other Kenyans (CBK).
He contends that transaction service fees should be covered by Safaricom’s major clients, including banks, rather than by individual customers.
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“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 pay bill service provider and their M-Pesa pay bill primary clients being the service recipients,” he says.
The case will be mentioned on January 23, 2023.
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.
The bank to mobile 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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