Court allows banks to resume charges on mobile cash transfers

"The court declines to extend the orders in view of the fact that parties are yet to be enjoined in the proceedings," said Justice Thande.

Wafula's lawyer Irine Nafuna told the court that it would be impossible to recoup money collected from mobile money subscribers if the court does not intervene.

"If the banks continue riding on this Mpesa Paybill infrastructure, making money from members of the public, and in the event that this court finds this Mpesa Paybill platform to be 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 task the banks to refund such funds collected from the members of the public," argues Nafuna.

Mobile service providers started charging their mobile wallet customers who have linked them to their bank accounts from January 1.

This is despite court orders freezing the exercise.

In the case, Wafula sued Safaricom, the Central Bank of Kenya (CBK), the Attorney General, the Communication Authority of Kenya (CA), and the Competition Authority.

He argues that it is unfair and illegal for Safaricom to charge customers while it acts as a collection agent for banks.

According to him, the charges should be between the banks and Safaricom and not the latter and the banks' consumers.

Commercial banks were charging between Sh30 and Sh197 before former President Uhuru Kenyatta ordered a break owing to the Covid-19 pandemic. The idea was to contain the spread of the disease through cashless transactions.

Although this was a reason for consumers to smile, the freeze meant banks would go without millions from the e-transactions.

However, the coin has against flipped and the banks have a reason to smile while consumers frown.

CBK in reintroducing the charges noted that the revised maximum charges for transfers from bank accounts to mobile money wallets will be reduced by on average up to 61 per cent, and mobile money wallet to bank account by on average up to 47 per cent.