The Central Bank of Kenya (CBK) has announced plans to cap the charges on person-to-person mobile money transfers. The decision is likely to shake-up the business model of dominant players like Safaricom’s M-Pesa and Airtel’s Airtel Money.
At the heart of the move is a concern that Kenyans still use mobile money largely for small money transfers, and for the basics—sending and receiving cash—while uptake of advanced products like digital loans, insurance, and savings remains at the base of the pyramid.
Under the new Kenya National Financial Inclusion Strategy 2025–2028, the regulator wants the average transaction cost slashed from Sh23 in 2024 to just Sh10 by 2028. At present, some fees climb as high as 6.9 percent of the amount sent, far steeper than what commercial banks charge for equivalent retail transactions.
The CBK argues that this pricing structure has significantly slowed down growth in mobile money usage, despite Kenya being one of the most digitally connected countries globally. While M-Pesa commands more than 90 percent of all mobile money transactions, person-to-person transfers alone account for nearly 40 percent of its revenues—making fee caps a direct hit on Safaricom’s bottom line.
Still, the regulator insists the changes are necessary. In a statement, it described mobile money as “the single most transformative tool for financial inclusion,” noting its role in bringing millions of Kenyans into the formal financial system since 2007.
Evidence from the COVID-19 pandemic supports that view. Between March 2020 and December 2022, when CBK temporarily scrapped fees on transactions under Sh1,000, active mobile money users shot up by 6.2 million. Transaction volumes nearly tripled, and the value of monthly transfers grew from Sh234 billion to Sh399 billion.
Even after the fees returned in 2023, they remain lower than pre-pandemic levels—suggesting that cost remains a powerful driver of financial behavior.
Today, Kenya has 47.7 million mobile money subscriptions, a penetration rate of 91 percent, according to the Communications Authority. But CBK warns that further growth depends on affordability, interoperability, and better-tailored financial products for underserved groups.
The regulator has pledged to work with telecom operators and Parliament to strike a balance between keeping services profitable and ensuring ordinary Kenyans are not priced out.
“Short-term commercial targets must be balanced with long-term sustainable growth,” CBK said, underscoring that the ultimate goal is a fairer and more inclusive digital financial system.
