Sacco clients to pay for bank digital wallets use

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Economy

Sacco clients to pay for bank digital wallets use


CBK

Central Bank of Kenya Governor Patrick Njoroge. FILE PHOTO | DIANA NGILA | NMG

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Summary

  • Savings and credit co-operative societies (saccos) members will bear the cost of transferring funds from their accounts to mobile money platforms operated by banks after the Central Bank of Kenya announced resumption of the charges.
  • The banking regulator did not allow banks to resume charges on transfers to mobile money wallets when lifting the emergency moratorium on transaction fees in December introduced to cushion customers during the Covid-19 scourge.

Savings and credit co-operative societies (saccos) members will bear the cost of transferring funds from their accounts to mobile money platforms operated by banks after the Central Bank of Kenya announced resumption of the charges.

The banking regulator did not allow banks to resume charges on transfers to mobile money wallets when lifting the emergency moratorium on transaction fees in December introduced to cushion customers during the Covid-19 scourge.

Saccos were allowed to make charges but most lack their own platforms and rely on third party providers such as banks who were demanding user fees.

CBK has now allowed third party providers including banks to charge fees to specific transactions linked to saccos.

“CBK announces the resumption of charges for transactions above Sh100 effected through bank specific (in-house) mobile money wallets that are closely linked to the savings and credit societies sector,” the regulator said in a statement yesterday.

There are about 4.78 million members of 172 regulated deposit taking saccos and millions more in over 2,286 unregulated societies.

Countrywide system

Third party platforms such as Co-op Bank in partnership with Ecclectis launched a mobile platform in 2013 for saccos providing a countrywide system that allows them to access banking services, transfer money, make payments, inquire balances and move money to M-Pesa and Airtel Money.

Cooperative Bank’s MCo-op Cash that supports 15 million members has issued new tariffs that will see customers pay between Sh20 to Sh50 for moving money to their wallets.

Inter accounts transfers and sacco charges will cost Sh20 in the new tarrifs.

“The bank has received regulatory approval from Central Bank of Kenya on new subsidised charges relating to MCo-ioCash wallet transfers to other wallets with full consideration on the needed relief to customers under Covid-19,” it said.

Central Bank imposed a waiver on fees for mobile transactions in mid-March to reduce cash payments to curb the spread of corona virus and has now announced the measures will end in January.

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