Banks and mobile money operators ignore court order, continue to charge fees for cash transfers

Recently, a temporary High Court order was issued to suspend fees for transferring cash between banks and mobile money operators. However, some companies have ignored this order and continued to levy these fees. The interim order was placed on December 19, 2022. Despite this, fees on bank-to-mobile transactions resumed on January 1 and have continued as usual. The case will be heard again on January 23 for further instructions.

An investigation on Friday revealed that Safaricom, the owner of the popular M-Pesa mobile money platform, and banks such as KCB and Equity, were still charging customers amounts exceeding Sh100. This is in direct violation of the court order granted until January 23, which stated that the charges should be suspended until the case is heard and determined.

The legal action initiated by Moses Wafula listed Safaricom, the Attorney General, the Competition Authority of Kenya, the Central Bank of Kenya, and the Cabinet Secretary for National Treasury and Economic Planning as defendants. The Central Bank of Kenya had gaven permission for banks to reintroduce fees on January 1, 2023 on December 6, 2022.

Wafula believes that consumers should not have to bear the cost of these fees and that M-Pesa Paybill charges were illegal. He had asked the court to stop these charges, stating that more funds from the public will be lost and it may be difficult to ask the banks to return them. Wafula also asserts that his rights and those of other members had been violated and infringed by the telecommunications firm and the Government of Kenya, in light of the directive issued by the Central Bank of Kenya.

Wafula also asserts that it is illegal for banks to continue utilizing the M-Pesa Paybill infrastructure and profiting from members of the public. He argues that the charges incurred for M-Pesa Paybill services should be the responsibility of Safaricom’s primary clients, such as banks, instead of consumers. He also emphasizes that as M-Pesa Paybill services are outsourced, Safaricom does not have the authority to charge members of the public for a service provided to its contracting service recipients, including banks.

It is important to mention that these charges were temporarily lifted on March 16, 2020, as part of measures to ease the use of mobile money during the Covid-19 pandemic. As a result, many Kenyan citizens and businesses switched to digital payments, which became a more accessible option for conducting transactions without additional costs.


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