Justice Mugure Thande of the Kenyan High Court has ruled for commercial banks in the country to resume charges on transfers between bank accounts and mobile money operators, less than two weeks after the same court ordered the suspension of such charges.
According to the judge, it would be improper to further intervene in the case as it is awaiting determination before another judge, Justice Anthony Mrima. She also cited that some of the parties affected by the order were “yet to be enjoined to the case.”
Justice Thande’s latest stand on the matter reflects the position of Kenya’s central bank, which had argued through its senior counsel George Oraro that the regulator and the banks were yet to be made a party to the case, and as such, the suspension should only come after all parties have presented their positions on the matter.
The case in question was filed by a Nairobi resident, Moses Wafula, who maintained that such charges were to be paid for by Safaricom’s primary clients such as banks, utilities, and government agencies—not reintroduced to the regular customers.
Free transfers: Kenya’s cashless policy initiative
In 2020, the year in which the pandemic caused the historic decline in cash use, Kenya’s central bank (CBK) came up with the idea of free transfers between commercial banks and users of Safaricom’s M-PESA, the country’s leading mobile money operator. The idea sailed, and Kenyans embraced digital payments more. It was free, after all.
But as the pandemic gradually faded, Safaricom and the banks went back to the CBK, asking for approval to re-introduce the transfer charges. The CBK finally agreed in December last year but stipulated a reduction in the fees: a 61% reduction for transfers from bank accounts to mobile money wallets and a 47% reduction on charges for transfers from mobile money wallets to banks.
In a separate statement released towards the end of last year, Safaricom announced a slew of tariff reductions, including M-PESA Paybill charges which, like wallet-to-bank transfer charges, were reduced by 47%, according to the CBK’s directive.
Interestingly, it seems like the Kenyan commercial banks knew it would come to this, as they had continued charging transfers to M-PESA wallets without the backing of the court. But now that the Kenyan High Court has okayed the transfer fees, Kenyans only have two options: pay charges on transfers they thought would be free forever, or wait for a miracle from Justice Anthony Mrima.