Inside Politics

Sacco clients’ pain as CBK reinstates transaction charges above Sh100

Tuesday, April 6th, 2021 00:00 |
Cash. Photo/PD/Courtesy

Central Bank of Kenya (CBK) has allowed resumption of charges for transactions above Sh100 effected through bank-specific mobile money wallets linked to the Savings and Credit Societies (Saccos) sector.

This move, which comes after a year-long waiver, means providers of dedicated mobile banking platforms that enable Saccos to offer mobile banking can now levy fees so that they can recover costs for the services.

According to CBK, the charges would have made the services unsustainable due to infrastructure and related costs of providing the service, especially since its supported by third party ICT service providers.

“A recurring concern has been that the viability of these services may be adversely affected in the current price regime, given the inability to cover the underlying costs,” said the banking sector regulator.

The Sacco sector is deeply integrated to these mobile wallets and accounts for a significant share of their transactions.

Through them, banks also provide Saccos with an important bridge to the domestic and cross border payment systems.

Mobile banking

Further, the tariff is expected to support further roll out of mobile banking to a larger number of Saccos deepening cash-lite transactions in line with the Covid-19 protocols that discourage the handling of cash.

This means dedicated wallets such as McoopCash that Co-op Bank offers to support mobile banking for Saccos can now levy a service fee to assist them to recover costs and keep the service viable and sustainable.

Co-op Bank will now charge Sh20 for transactions between Sh101-500 and up to Sh50 for those transacting above Sh30,000 to a limit of Sh70,000.

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