CBK orders phone firms to cut cash transfer fees
Joseph Kiheri | NATION
Central Bank of Kenya Governor Prof Njuguna Ndung’u shortly after unveiling a plaque to officially open the Chase Bank in Nakuru town on January28, 2011. The Governor on January 31, 2011 asked mobile phone companies to reduce charges for their cash transfer services.
Mobile phone operators, who are still smarting from the recent drop in calling rates, are facing another war front after the Central Bank of Kenya termed the cost of their money transfer services as too high.
CBK governor, Prof Njuguna Ndung’u, said on Monday he expects the operators — Safaricom, Airtel Kenya, Telkom Kenya, trading as Orange, and Essar Telecom, trading as yu — to announce new charges for their services.
“They must bring down the unit cost of their money transfer services. There is no way one can send Sh50 at Sh35. We expect to see new tariffs very soon,” the governor said.
His call comes hot on the heels of Airtel Kenya’s recent tariff promotion in which it reduced its calling rates from Sh3 to Sh1, triggering condemnation from its competitors who termed the move as unsustainable.
He revealed that the reduction is among the conditions the operators agreed to before CBK allowed them to review the limits on the amount that can be transferred from Sh35,000 to Sh70,000 per transaction.
“If they refuse (to reduce the transaction costs), we will refuse to approve the limits. It is not a choice of how much they have to charge but how affordable and reasonable the charge is,” Mr Ndung’u said during a financial education implementation programme briefing to business editors and reporters in his office.
Although the phone companies fall under the industry regulator, Communication Commission of Kenya, their money transfer services is regulated by CBK, the banking industry regulator.
But when contacted, Safaricom chief executive officer Bob Collymore, said their M-Pesa charges represent true value for money.
“We constantly review our charges to ensure they are at one with market dynamics and the needs of our subscribers. Should we institute new charges, we shall share the information with the market,” Mr Collymore said.
His Telkom Kenya counterpart, Mickael Ghossein, said since the customers are directly manipulating their bank accounts from the phones, the costs of their service, Orange Money, are cheaper in terms of time and money compared to physically going to the bank branch.
“But we are studying carefully the transaction trends and customer demands and will be revising our tariff structure accordingly,” he said.
