The Central Bank of Kenya (CBK) is set to reduce the fees associated with transferring money through M-Pesa and Airtel Money, citing that excessive charges are hindering innovation and slowing the advancement of financial inclusion in one of the globe’s most sophisticated mobile money ecosystems.
As part of its 2025-2028 National Financial Inclusion Strategy, the regulator intends to impose limits on peer-to-peer (P2P) transaction fees. The goal is to bring down the average cost per transaction from KES 23 ($0.18) in 2024 to KES 10 ($0.078) by 2028. CBK believes that lowering these fees will integrate millions of low-income individuals into the digital financial system and encourage the adoption of more sophisticated financial products beyond simple money transfers.
“Data trends indicate a stagnation in the growth of mobile money access and usage,” CBK noted. “The majority of users continue to depend mainly on fundamental services such as person-to-person transfers, with minimal engagement in advanced financial products like digital loans, insurance, or savings accounts.”
This plateau in growth is occurring despite Kenya’s mobile money platforms processing unprecedented transaction volumes. In 2024, mobile money operators handled approximately KES 8.7 trillion ($67.3 billion), an increase from KES 7.9 trillion ($61.1 billion) the year before. On average, daily mobile money transactions reached KES 21 billion ($162.5 million), highlighting the system’s vital role in the economy.
However, CBK has cautioned that the expansion in user numbers is slowing. Mobile money adoption has surged from 27% of adults in 2007 to 82.3% in 2024, but further growth is becoming challenging due to the high transaction costs.
“Factors such as limited interoperability between platforms, steep transaction fees, low levels of financial literacy, and product designs that fail to meet the needs of underserved populations contribute to this slowdown,” the regulator explained.
Currently, Safaricom’s transfer fees range from KES 7 ($0.054) to KES 108 ($0.84), depending on the amount sent. Airtel Money provides free transfers within its own network but charges between KES 6 ($0.047) and KES 105 ($0.82) for transfers to other networks.
CBK argues that maintaining such high fees is unsustainable if mobile money is to continue serving as a tool for financial inclusion. The regulator emphasizes that pricing models should be “aligned with low-value transactions and other payments considered public goods,” balancing the commercial interests of operators with the broader objective of expanding financial access.
Mobile money has become a crucial revenue stream for Kenyan telecommunications companies as traditional income from SMS and voice services declines. In 2024, M-PESA generated KES 161.1 billion ($1.2 billion) in revenue, accounting for roughly 44% of Safaricom’s service income.
The success of CBK’s initiative will depend heavily on political determination. The Kenyan Parliament, responsible for enacting the proposed regulations, faces a choice between protecting consumer interests or supporting telecom companies concerned about reduced profitability.
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