A High Court in Kenya has stopped the reintroduction of fees on transactions made between mobile money wallets and lenders, until a legal case involving consumer rights activist is resolved. This decision was taken after Moses Wafula, filed a complaint against the reintroduction of charges that were suspended in 2020 as a result of the COVID-19 pandemic.
Moses Wafula who filed the application believes that the charges that were scheduled to take effect on January 1, 2023 should not be passed to consumers. He argues that the directive issued by the Central Bank of Kenya (CBK) and Safaricom, Kenya’s largest mobile network operator, had violated his rights and the rights of other Kenyans.
In his application, Mr. Wafula states 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. He contends that 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 paybill service provider and their M-Pesa paybill primary clients being the service recipients.
The Central Bank had announced the reinstatement of the charges in December 2020, in a move that would have offered relief for commercial banks that have decried the regulator’s reluctance to reinstate the fees. However, the regulator said the new charges would be lower than the previous charges that were applied before the waiver. The CBK stated that maximum charges for transfers from bank accounts to mobile money wallets would be reduced by up to 61%, and mobile money wallet to bank account by up to 47%.
The charges were suspended on March 16, 2020, as a part of the emergency measures put in place to make it easier for people to use mobile money during the peak of the Covid-19 pandemic. The outcome of the case, which is scheduled to be discussed on January 23, 2023, will determine whether or not the charges will be passed on to consumers.