CBK to tame mobile rate transactions in fresh reforms
The Central Bank of Kenya (CBK) has formulated a set of principles that will help govern costs which come with digital payments and mobile banking.
In an attempt to strengthen the landscape on national payments, CBK eyes to tame digital transaction costs and will take place in a year’s time.
The move is meant to facilitate competition among different service providers and financial inclusion in the country.
The evolving of landscape payments to include new solutions such as stable coins, alternative coins, cryptocurrencies as well as the new Central Bank Digital Currencies (CBDCs) has led to CBK wanting to move in the same direction.
Various challenges have been highlighted by the regulator in relation to transaction fees, hence leading to the imposing of the principles that is set to run from 2022 to 2025.
Among the challenges highlighted include market power concentration that have created a limitation to customers who seek to use services such as Automated Teller Machines (ATMs).
“The aim for this is to ensure that payment systems especially at the retail level enhance choice, competition and seamless payments across different payment channels and store of value,” part of the strategy document read.
CBK has also put in place other tactical initiatives that will be employed within the given time, including usefulness, security, regulation, innovation and trust.
These interventions will help in bridging the gap, bringing about the inclusion of universal financial inclusion which is currently at a rate of 83 percent.
Prior to this, CBK had interceded to make Payment Service Providers (PSPs) lower their transaction costs as per customer demands, as well as putting a partial waiver on all costs regarding mobile money that is within Ksh.1000.
Transaction costs between bank accounts and mobile wallets have also remained frozen after the directives that were given in March 2020.