Equity steps up push for return of bank to mobile transfer charges – Business Daily

Equity Group Managing Director and CEO Dr James Mwangi at the Equity Centre in Nairobi on Monday, October 25, 2021. PHOTO | DENNIS ONSONGO | NMG
Equity Bank #ticker:EQTY has asked the Central Bank of Kenya to reinstate charges on transfers of money from bank accounts to mobile money wallets.
The lender’s boss, James Mwangi, says reinstating the fees frozen almost two years ago will level the playing field between Banks, telcos operating in the financial space and micro lenders.
The lenders have witnessed a fall in fees and commissions from such transactions and eye the end of the freeze to rev up non-interest income.
Bankers say the easing of Covid-19 effects in the economy would allow it to push for the return of the charges.
“We have seen the central bank has reinstated the charges of microfinance institutions it has reinstated it has reinstated for telecom sector we hope the transaction mobile fees for the bank are also going to be considered for reinstatement s that we can have a level playing field,” Mwangi said.
The reliefs on mobile phone payments were introduced from March 16 to encourage cashless payments on mobile phones as part of efforts to contain the spread of the coronavirus.
They included a doubling of the daily transaction limits to Sh300,000 after the first case of Covid-19 was reported.
Banks are losing millions per month due to the free transfers between them and wallets such as M-Pesa given that they used to charge fees ranging from Sh30 to Sh197 before the waivers were introduced.
At the end of 2020, CBK rejected bankers’ push to reinstate fees on the transfer of cash between accounts and mobile phone wallets, even as it ended free M-Pesa transactions of up to Sh1,000.
Banks failed to lobby the CBK to return the fees of moving money between their mobile wallets and bank accounts that saw some like KCB Group lose Sh1.5 billion in the nine months.
CBK in April announced the resumption of charges of on bank to mobile wallets that are linked to the Sacco sector, prompting lenders such as Co-operative Bank to roll out discounted rates.
Bankers reckon that the waiver of fees on bank-to-mobile phone transactions triggered an increase in deposits as small businesses embraced the digital channel and cut branch visits for cash deposits.
CBK also said the free M-Pesa service had led to increased use of the mobile money transfer and added users to the telco’s cash service.
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By Kwetu Buzz

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