High Court Suspends Bank To Mobile Money Charges

The High Court has issued a temporary order stopping the reintroduction of transaction charges on the bank to M-Pesa money transfers.

The order, issued on Thursday followed a petition by a Nairobi resident Moses Wafula who argued that the reintroduction of transaction charges between mobile money wallets and bank transactions, is a violation of his rights and the right of other members of the public.

Wafula argued that should the High Court find out that charges on Mpesa Paybill are illegal, a huge sum from the members of the public will have been lost and it would be difficult to recover them.

“THAT, if the Banks continue riding on this Mpesa Paybill infrastructure, making money from members of the public, then in the event that this honorable court finds this Mpesa Paybill platform in contravention of the constitution and various statutory provisions, the impact will be higher; more funds from the members of the public would have been lost and it may be a lot more difficult to ask the banks to refund such funds collected from the members of the public,” he argues.

According to Wafula, charges incurred in transaction services are to be paid by Safaricom’s primary clients such as banks and not by consumers.

“The petition pending determination illustrates that the engagement between Safaricom and its M-Pesa Paybill clients (such as Banks, Government agencies, Kenya power, DStv, Betting firms, 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,” he says.

The matter has been scheduled for mention on January 23, 2023.

The resumption of the charges between mobile money wallets and bank accounts was announced on December 6 by the Central Bank of Kenya (CBK. In a statement, CBK Governor Patrick Njoroge said the resumption of revised charges is geared towards building on the gains on the financial system, as well as facilitating a transition towards sustainable growth of the mobile money ecosystem.

The charges introduced by the regulator are however low compared to those applied before and will see Kenyans pay up to 61 percent low to transact from bank accounts to mobile money, and up to 47 percent low while transacting from mobile money wallets to bank accounts.

The charges were suspended on March 2020 in a move aimed at discouraging the use of cash during payments to contain the spread of COVID-19.