Kenya Central Bank Proposes Mobile Money Fee Caps
The Central Bank of Kenya has proposed reducing average mobile money transaction fees from $0.18 to $0.08 by 2028 and capping person-to-person transfer charges, potentially impacting significant revenue streams for telecommunications operators like Safaricom and Airtel.
High Transaction Costs Limit Financial Service Adoption
Mobile money access among Kenya’s adult population increased from 27% in 2006 to 82.3% in 2024, but recent data indicates plateauing growth. CBK identifies high transaction costs as a major barrier to expanded usage of digital financial services beyond basic transfers.
“Most users still rely primarily on basic services like person-to-person transfers, with limited uptake of advanced offerings such as digital credit, insurance, or savings. This is attributed to issues such as limited interoperability, high transaction costs, low financial literacy, and product designs that do not reflect the realities of underserved groups,” CBK stated in its National Financial Inclusion Strategy.
Telco Revenue Streams Face Regulatory Pressure
Safaricom charges no fees for M-Pesa transfers of $0.77 or below, with rates ranging from $0.10 for 501-1,000 transactions to $0.84 for 50,001-250,000 transfers. Airtel Money offers free transfers among Airtel customers but charges $0.05 to $0.81 for inter-network transactions depending on amount. M-Pesa generated $1.246 billion for Safaricom’s financial year ending March 2025, representing 44.2% of the Kenya unit’s service revenue.
CBK marked the proposal as high-priority, though implementation requires parliamentary approval. The fee reduction could ease transfer costs for millions of Kenyans while significantly affecting telecommunications companies’ profit margins that have become substantial revenue drivers.
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