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Kenya approves fee for mobile money transfers

February 19, 2013 • Mobile and Telecoms

Kenya’s government announced it was ready to implement a new fee on all mobile money transfers in the country in an effort to ”even the playing field” for all telecom operators in the country.

Kenya's government has announced its readiness to implement a new fee on all mobile money transfers in the country.(Google/pixelballads.wordpress.com)

The move has not been well received by analysts and observers, who question whether the costs would drive up charges for users and lead to a decrease in use of mobile money in the East African country.

Finance Minister Njeru Githae said that “a minimum charge per transaction would be introduced soon, so that companies offering money services free also have to pay tax, like Safaricom, Airtel and Yu.”

Those companies are currently offering mobile money free of charge on their platforms, which Githae argued frees them from the obligation of having to pay the ten percent tax introduced.

He said the goal is to even the market for greater competition, which the ministry argued would drive down costs.

Githae said “Safaricom has decided to absorb the tax for small transactions of less than KES 100, putting it in an uncompetitive position with the rest.”

He continued that “the concern is about those offering free services as there is always a cost associated with transferring money.”

Githae, however, backtracked on an earlier directive that the companies should “not pass on the cost to consumers, saying the government had expected providers would absorb the cost, but that it is a free market and the government does not want to interfere.”

Mohammed Awad

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