When comparing fees across transaction bands, Airtel Money is more expensive for bank clients to use than M- Pesa. In accordance with an agreement with the Central Bank of Kenya, on Sunday the banks resumed charging for bank- to- mobile cash transfers, but at significantly lower rates than those in effect before the outbreak (CBK).
Banks have imposed greater costs on most transfers to Airtel Money compared to M- Pesa, as shown by an examination of the new prices communicated to clients. The reason for this is that when combined with the bank fee, the transaction fees charged by Airtel are more than those charged by the banks.
Unlike Safaricom’ s tiered pricing structure, Airtel’ s is uniform across nearly all bands at Sh10. The highest value transfer bands, including the maximum transfer of Sh150, 000, are discounted when sent to an Airtel wallet.
Multiple banks in Kenya, such as Equity Bank Kenya, National Bank of Kenya, and Family Bank, have sent tariffs that show significant price discrepancies between the two mobile money platforms. For example, across most of the bands, Equity Bank charges an extra Sh1 to Sh2 when money is sent to an Airtel wallet.
Lenders charge Sh10 for transfers between Sh101 and Sh500 to M- Pesa, and Sh11 for transfers to an Airtel wallet. There is a discount of Sh2 to a total cost of Sh65 when sending money to Airtel, but only in the highest value band (Sh20, 001 to Sh150, 000).
The fee of Sh55 remains consistent between the two mobile platforms for the range of Sh5, 001 to Sh7, 500. For those relocating between 7, 501 and 20, 000, the fee remains the same, at 65. With more than 90% of the mobile money market share, M- Pesa is clearly the dominant player. While Airtel comes in second, Telkom Kenya’ s T- Kash has a tiny share of the Kenyan market.
Safaricom and the leading retail banks stand to gain the most from the reinstatement of charges for bank- to- mobile transfers, which will increase their earnings. Millions of people in the country use mobile banking services like Equity Bank, KCB, Co- operative Bank, and NCBA.
As a result of suspending fees to encourage the use of electronic payments and provide some financial relief to households in the wake of the Covid- 19 outbreak, Safaricom and the banks lost billions of shillings.
