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Financial sector players have criticised Central Bank of Kenya’s (CBK) move to unilaterally extend the waiver on mobile transaction fees to the end of the year.

Banks and telecommunication providers protested the measure aimed at cushioning Kenyans against the financial effects of Covid-19 and promoting cashless transactions, saying they had equally taken a major hit from the pandemic.

Most of them make money by charging fees on transactions, some of which have since been scrapped.

CBK insisted the extension had the blessing of all the players. However, insider sources, who did not want to be seen to second-guessing the financial regulator, said the extension was done without their input.

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Over 175,000 M-Pesa operators have been negatively affected by the measures that waived charges for money transactions up to Sh1,000. The exemption that came into force on March 16, was announced by CBK Governor Patrick Njoroge.

With most people transacting directly, M-Pesa agents have found themselves idle as people see no need to withdraw cash. Moreover, most dealers miss out on the commission that they get on fees charged per transaction.

Besides telecommunications providers such as Safaricom and Airtel, banks have also minted billions from mobile money transactions.

While extending the emergency measures aimed at encouraging usage of mobile transactions, CBK Governor noted that there had been an increase in low-value transactions. Eight in 10 mobile transactions are of low-value sums of below Sh1,000, according to CBK.

Charges for these transactions were scrapped, leading to an upsurge in the number of customers transacting through mobile phones by 1.6 million, according to a CBK statement.

SEE ALSO: Eight Covid-19 patients die in hospital fire in western India

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