Kenya’s CBK aims to cut mobile money fees by 2028, reshaping digital payments with global lessons for fintech and regulators.
Kenya to Slash Mobile Money Fees by 57%
NAIROBI, Kenya’s central bank has unveiled plans to slash average person-to-person (P2P) mobile money fees by more than half, a reform expected to ripple through Africa’s $1 trillion digital payments market.
The Central Bank of Kenya (CBK) said in a policy paper that it aims to reduce transfer costs from around KES 23 ($0.15) to KES 10 ($0.07) by 2028 under its new National Financial Inclusion Strategy 2025–2028.
From Sept. 1, CBK requires all variable-rate loans to use KESONIA,a new benchmark for setting interest rates.
A global benchmark for digital finance
Kenya, home to Safaricom’s M-Pesa, the world’s most successful mobile-money platform, has long set the pace in digital finance. Analysts say the reform could provide a global benchmark for regulators seeking to expand financial access while balancing sustainability of payment networks.
“Reducing fees is about more than just affordability. It’s about catalyzing inclusion and ensuring mobile money remains central to Africa’s growth,” said a Nairobi-based payments strategist quoted by Pulse Live Kenya.
Industry impact
The policy could hit revenues for telcos and banks that rely heavily on transaction fees. Safaricom, which controls nearly 99% of the Kenyan market, reported that mobile money generated KES 117.2 billion ($780 million) in revenue in its last fiscal year, according to Kenyan Wall Street.
But regulators argue that lower costs will expand volumes, compensating for thinner margins. The CBK believes cheaper transfers will encourage daily use, boost cross-border remittances, and draw millions of unbanked Kenyans into formal finance.
Balancing growth and sustainability
Still, concerns remain about whether agent networks — which earn commissions on transactions — can remain viable. A report from CIO Africa notes that CBK will work with operators to safeguard agents’ earnings while enforcing transparency in fee structures.
Inflationary pressures and cost-of-living concerns add urgency to the reforms. Kenya’s economy, East Africa’s largest, expanded by 5.6% in 2024, but households continue to struggle with high food and fuel costs, according to World Bank data.
Investor and global implications
For global fintechs and investors, Kenya’s decision signals both opportunity and risk. Lower fees could attract foreign players into a market long dominated by local incumbents, especially after the government moved to liberalize the telecoms and banking sectors.
“Kenya is once again setting the tone for Africa’s fintech ecosystem,” said an analyst at a Johannesburg investment bank. “What happens in Nairobi could easily influence Lagos, Johannesburg, and even regulators in India.”
The reforms arrive as African mobile money transactions surpassed $1.26 trillion in 2023, according to the GSMA. Kenya’s precedent could accelerate similar moves in Nigeria, Ghana, and Tanzania.
The road ahead
The CBK has opened a public consultation, with final regulations expected by mid-2026. Operators will be given a two-year transition window, with full compliance required by 2028.
If successful, Kenya could show that cutting digital transaction fees not only enhances inclusion but also spurs innovation in credit, savings, and insurance products linked to mobile money.