Kenyans were spoilt for choice when the Central Bank of Kenya dismissed bank-to-mobile money charges back when the COVID-19 pandemic had started. This was to ease the economic burden that came along with the virus and at a time when some people lost their jobs, or could not work due to restrictions that were introduced by the government and other healthcare institutions to contain the disease.
This year, the CBK dropped the waiver, which meant that banks were now free to charge their customers for the said transactions. While most of them introduced these fees, I&M has been singled out as the only leading lender that has since dropped the charges, meaning their customers do not incur any fees when they send money to mobile money wallets.
It is an interesting development in this space, which will likely work for the bank considering there are customers who transact regularly (to mobile money wallets), and any service that reduces or gets rid of transaction charges is a welcome addition.
We should also mention that lenders such as NCBA Loop were not charging customers for bank-to-mobile money transactions. While Loop continued to do so at the start of 2023, the free service was only short-lived because NCBA revamped the neobank by adding a ton of new features on the Loop platform, and introduced charges to services that were previously free.
Of course, there was a backlash, and while things are yet to be fully addressed, Loop has adjusted some of its rates downwards, including bank-to-mobile money fees, which appear to be slightly more affordable than what M-PESA charges for respective transaction ranges. Also remember, depositing funds from M-PESA to Loop is now free, but you have to use the 714777 paybill number.
Here is how the two (Loop to Mobile Money/M-PESA and M-PESA to M-PESA) compare:
Loop to M-PESA/Mobile Money
| Amount Range | Fee in KES |
|---|---|
| 50 – 100 | 0 |
| 101 – 500 | 6 |
| 501 – 1000 | 12 |
| 1001 – 1500 | 18 |
| 1501 – 2500 | 30 |
| 2501 – 3500 | 36 |
| Above 3501 | 48 |
M-PESA Tariffs
| Transaction Range in KES | Min | Max | Transfer to other M-PESA users |
|---|---|---|---|
| 1-49 | 1 | 49 | FREE |
| 50-100 | 50 | 100 | FREE |
| 101-500 | 101 | 500 | 6 |
| 501-1,000 | 501 | 1,000 | 12 |
| 1,001-1,500 | 1,001 | 1,500 | 22 |
| 1,501-2,500 | 1,501 | 2,500 | 32 |
| 2,501-3,500 | 2,501 | 3,500 | 51 |
| 3,501-5,000 | 3,501 | 5,000 | 55 |
| 5,001-7,500 | 5,001 | 7,500 | 75 |
| 7,501-10,000 | 7,501 | 10,000 | 87 |
| 10,001-15,000 | 10,001 | 15,000 | 97 |
| 15,001-20,000 | 15,001 | 20,000 | 102 |
| 20,001-35,000 | 20,001 | 35,000 | 105 |
| 35,001-50,000 | 35,001 | 50,000 | 105 |
| 50,001-150,000 | 50,001 | 150,000 | 105 |
As seen, it is actually cheaper to send cash from Loop to M-PESA or any other mobile money wallet, especially for amounts above KES 3000. Loop makes it easier in the sense that all funds above 3500 sent to M-PESA/T-Kash/Airtel Money only attract KES 48 in fees. M-PESA charges more, and the fees grow with increasing transaction ranges.
Remember, this is an adjustment by Loop. Immediately after its revamp, it was charging KES 36 for Loop to mobile transfers above KES 1500. While I would have wanted that amount to be retained, the recent adjustment still works for most people.
So, which one would you rather use, or you have since moved to I&M?
