CBK plans to slash mobile money fees by more than half

The Central Bank of Kenya (CBK) plans to slash the cost of sending money by mobile phone, a vital service used by millions of Kenyans daily.

The move aims to halve transaction fees within four years to cushion households and boost the use of formal financial services.

CBK has set a formal target to cut the average fee for person-to-person (P2P) mobile transfers to Sh10 by 2028, down from about Sh23 currently, according to its National Financial Inclusion Strategy for 2025-2028, published this week.

The new plan is a core part of a national effort to make financial services more affordable and useful for all Kenyans. The strategy notes that "affordability was found to be the main barrier to financial product usage," with high costs limiting the potential benefits of Kenya's famed mobile money revolution.

The CBK aims to achieve this by enforcing caps on fees and promoting interoperability-a technical term for allowing seamless money transfers between different mobile networks and banks-through a new Fast Payment System (FPS).

This shared infrastructure is designed to increase competition and lower costs for consumers.

For the average Kenyan, the savings would be direct and frequent. A typical Sh1,000 transfer, which currently costs about Sh23, would drop to around Sh10.

For a small business owner or a family making several transactions a day, the accumulated savings could be significant, effectively putting money back into users' pockets.

The push to lower costs comes as the mobile payments market has ballooned into the backbone of Kenya's informal economy. CBK data shows mobile money subscriptions grew to 71.4 million accounts in 2024, with a staggering Sh8.7 trillion transferred over the networks. Adult usage has soared to 82.3 per cent from just 27 per cent in 2006, largely driven by the success of Safaricom's M-Pesa.

"The strategy emphasises coordinated implementation through a robust governance structure," CBK said, framing the fee reduction not as a standalone measure but as a key step to improve financial health-a concept defined in the document as people's ability to manage daily needs, absorb shocks, and invest for the future.

By making digital transactions cheaper, the CBK hopes to encourage a deeper shift away from cash, increase savings, and build economic resilience for low-income Kenyans, cementing the country's position as a leader in inclusive digital finance.