CBK to cap M-Pesa, Airtel Money transaction fees

The Central Bank of Kenya (CBK) has announced plans to cap the cost of sending money via M-Pesa and Airtel Money, as part of its plan to bolster financial inclusion in the country.

In a statement, CBK said the move is part of its 2025–2028 National Financial Inclusion Strategy, which aims to reduce the average transaction cost from the current Sh23 to Sh10 by 2028.

According to the regulator, most Kenyans still use mobile money primarily for basic services like person-to-person transfer with limited uptake of advanced offerings such as digital credit, insurance, or savings.

Currently, charges on some mobile money transfers can reach as high as 6.9 percent of the transaction amount, considerably higher than fees banks charge for retail cash movements.

CBK says the expensive transactions and limited financial products have slowed mobile money adoption in the country.

“Recent data shows signs of plateauing growth in mobile money access and usage. Most users still rely primarily on basic services like person-to-person transfers, with limited uptake of advanced offerings such as digital credit, insurance, or savings,” CBK stated.

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The regulator argues that cutting fees will bring millions of low-income users into the digital economy and spur uptake of new services beyond basic money transfers.

This reflects previous outcomes when CBK temporarily scrapped charges on mobile money transfers below Sh1,000 during the COVID-19 pandemic period.

During the period, active users jumped by more than 6.2 million, while monthly person-to-person transactions rose from 162 million to 440 million between March 2020 and December 2022. The value of these transactions grew from Sh234 billion to Sh399 billion.

Safaricom currently charges between Sh7 and Sh108 for M-Pesa transfers, depending on the amount. On the other hand, Airtel Money offers free transfers within its network but charges Sh6 to Sh105 for inter-network transactions.

The CBK’s plan to cap transaction fees is expected to put pressure on the platforms’ revenues, given that person-to-person cash transfers account for nearly 40 percent of M-Pesa’s income.

Launched in 2007, M-Pesa has, over the years, grown to become the widely used money transfer service in Kenya. The platform boasts over 90 percent of mobile money transactions and has driven financial inclusion to 83.7 percent in 2021 from a low of 26.7 percent in 2006.