On 16 March 2020, with Kenya’s first COVID-19 instances confirmed, President Uhuru Kenyatta made an uncommon financial resolution. Moderately than stimulus packages, he known as for one thing deceptively easy: make small digital transactions free. The CBK moved with uncommon velocity, issuing a directive that eliminated all expenses on cellular cash transfers as much as KES 1,000 from midnight — alongside elevating the each day transaction restrict from KES 70,000 to KES 150,000, and eradicating charges on transfers between financial institution accounts and cellular cash wallets completely.
It was offered as a short lived emergency measure. What unfolded over the next 9 months was, on reflection, one of many clearest demonstrations of what Kenyan monetary infrastructure is able to. And what it has been quietly leaving on the desk ever since.
2.8M New cellular cash customers joined throughout the free-transfer interval, March–December 2020
87% Rise in month-to-month P2P transaction volumes between February and October 2020
80% Of all cellular cash transactions fell beneath KES 1,000 — the band made free
Supply: CBK Overview of Emergency Measures, June 2020 & December 2020 — by way of Tech-ish.com (June 2020) and Tech-ish.com (December 2020).
Half I: What Truly Occurred in 2020
The CBK’s directive was easy: no expenses for cellular cash transactions as much as KES 1,000, and no charges on transfers between banks and cellular cash wallets. These measures ran from 16 March to 30 June 2020. On 24 June 2020, the CBK reviewed them and prolonged them by means of 31 December 2020, calling them “well timed and extremely efficient.”
The info was unambiguous. Each day transaction volumes rose by a mean of 9.4% inside weeks. The month-to-month quantity of P2P transactions surged from 162 million to 440 million. The worth of transactions between cost service suppliers and banks leapt from 18 million transactions value KES 157 billion a month to over 113 million transactions value KES 800 billion. Over 2.8 million Kenyans who had by no means used cellular cash joined throughout the interval.
“This band accounts for over 80 p.c of cellular cash transactions and expenses had been eradicated, which has helped cushion probably the most weak households.”
— CBK Overview of Emergency Measures, June 2020
That line ought to nonetheless be conserving regulators up at evening. The sub-KES 1,000 band wasn’t a distinct segment nook of cellular cash. It was, and stays, the overwhelming majority of it. Each mama mboga transaction. Each bodaboda fare. Each small school-fee instalment despatched upcountry. These are the transactions that carry the best charges as a proportion of worth. They usually represent the financial heartbeat of most Kenyan households.
16 March 2020
CBK points emergency directive efficient from midnight: all cellular cash transfers as much as KES 1,000 zero-rated. Each day transaction restrict raised from KES 70,000 to KES 150,000. Financial institution-to-mobile pockets transfers made free.
24 June 2020
CBK extends all measures by means of 31 December 2020, citing 1.6 million new customers and a 9.4% each day transaction improve. Describes the measures as “well timed and extremely efficient.”
17 December 2020
CBK pronounces measures will expire on 31 December 2020. By this level, 2.8 million new customers have joined cellular cash and month-to-month P2P volumes are up 87% since February.
1 January 2021
Fees reinstate — however Safaricom completely reduces its tariffs by as much as 45% for ~90% of transactions. Transfers beneath KES 100 stay free. Financial institution-to-mobile pockets transfers stay free as an enduring structural acquire from the pandemic interval.
December 2021
The Kenya Bankers Affiliation (KBA) begins lobbying CBK to reintroduce bank-to-mobile expenses — regardless of banks being among the many main beneficiaries of the free-transfer interval that had pushed tens of millions of latest buyer deposits into their accounts.
6 December 2022
CBK pronounces bank-to-mobile expenses will return from 1 January 2023 at decreased charges. A Excessive Courtroom problem briefly suspends the reintroduction; expenses finally stand.
Early 2023
Financial institution-to-mobile expenses reinstate throughout all main lenders — KCB, Fairness, Co-operative, NCBA, Absa, Normal Chartered, DTB, Stanbic. The lone exception: I&M Financial institution, which completely absorbs the charges below its “Ni Sare Kabisa” proposition, changing into the primary Kenyan financial institution to formally provide zero bank-to-mobile charges.
5 February 2026
Safaricom launches Ziidi Dealer — dwell NSE inventory buying and selling from inside the M-PESA app. No dealer. No paperwork. A KES 4,500 commerce prices KES 68.50 all-in. Not constructed by a financial institution. Not by a fintech startup. By a cellular community operator.
Half II: The Regressive Economics of Small Transaction Charges
There’s a basic injustice baked into the present M-PESA tariff construction that hardly ever will get named plainly: the much less cash you might be transferring, the upper the proportion you pay to maneuver it. Even after the post-2020 reductions, the construction stays deeply regressive. Sending KES 500 now prices KES 7, that’s 1.4% of the transaction. Ship KES 100,000 and also you pay KES 108, simply 0.11%.
The Regressive Payment Construction: What You Truly Pay Proper Now
Transaction Vary (KES)M-PESA Payment (KES)Payment % of Min AmountFee % of Max AmountBurden1 – 100Free0percent0percent101 – 500KES 76.9percent1.4percent501 – 1,000KES 132.6percent1.3percent1,001 – 1,500KES 232.3percent1.5percent1,501 – 2,500KES 332.2percent1.3percent2,501 – 3,500KES 532.1percent1.5percent3,501 – 5,000KES 571.6percent1.1percent10,001 – 15,000KES 1001.0percent0.67percent20,001 – 35,000KES 1080.54percent0.31percent35,001 – 250,000KES 1080.31percent0.04%
Supply: Safaricom M-PESA Shopper Tariffs (present, final up to date Might 2024). Sending KES 200 prices KES 7 — an efficient fee of three.5%. Sending KES 200,000 prices KES 108 — simply 0.05%. The regressive construction isn’t incidental: it’s baked into the structure of near-fixed transaction prices. The folks paying the best efficient charges are those that can afford it least.
Case Examine
I&M Financial institution: “Ni Sare Kabisa” — What Occurs When a Financial institution Truly Absorbs the Payment
1st Kenyan financial institution to completely waive bank-to-mobile charges after CBK reinstated expenses in Jan 2023
+18% Internet revenue progress within the 9 months ending September 2024 vs similar interval 2023
KES 9.1B Internet revenue, 9 months to September 2024 (up from KES 7.7B)
When the CBK reinstated bank-to-mobile expenses efficient January 2023, each main Kenyan lender fell in line — KCB, Fairness, Co-operative, NCBA, Absa, Normal Chartered, Diamond Belief Financial institution, Stanbic. Each one besides I&M Financial institution.
Beneath its “Ni Sare Kabisa” (It Is Utterly Free) proposition, I&M completely absorbed bank-to-M-PESA and Airtel Cash switch charges for all private account holders — saving prospects between KES 10 and KES 65 per switch. The financial institution cited rising cost-of-living pressures and direct buyer suggestions because the rationale. In April 2024, it prolonged the identical zero-fee provide to sole proprietorships, acknowledging that small companies contribute over 40% of GDP and are acutely delicate to transaction prices.
What adopted commercially makes the remainder of the sector’s inaction look even tougher to defend. Private account numbers grew materially. The financial institution expanded aggressively below its iMara 3.0 technique, concentrating on 100 branches nationally. Internet revenue rose 18% to KES 9.1 billion within the 9 months to September 2024. This was not achieved regardless of waiving the price — it was achieved partly due to what waiving the price signalled and delivered in buyer acquisition and loyalty.
Absorbing the price was not charity. It was a product resolution — one which handled a value as a customer-acquisition lever and was vindicated commercially. It’s the clearest obtainable proof that the remainder of the sector’s “we can not afford to waive charges” place is a selection, not a structural constraint. I&M selected in a different way. The numbers adopted.
Half III: The Irony: Banks Lobbied Towards the Very Factor Rising Them
Right here’s the element that hardly ever will get mentioned. Throughout the free-transfer interval, the first institutional beneficiaries of tens of millions of Kenyans shifting their monetary lives onto cellular cash had been the banks themselves. Each shilling flowing from M-PESA right into a checking account was a deposit. With free transfers, many Kenyans put their cash in banks, to keep away from expensive cellular cash charges. Banks ought to’ve considered correct interoperability for issues like Lipa na M-Pesa. Or extra revolutionary concepts. To maintain the shoppers.
And but, by December 2021, the Kenya Bankers Affiliation was lobbying CBK to reintroduce bank-to-mobile expenses. They noticed free transfers as a income drain slightly than a technique to purchase prospects, and construct merchandise round them. The argument that banks had been “dropping tens of millions” monthly was in a bizarre means ignoring the tens of millions being gained in deposits and account openings that these very transfers had been enabling.
The CBK relented in December 2022, asserting the return of expenses efficient 1 January 2023. Kenya’s banking sector returned to treating transaction charges as income slightly than as a possibility for progress and innovation. The establishments greatest positioned to profit from a extra fluid monetary system had been probably the most aggressive in defending the friction.
Half IV: Banks Slacked. M-PESA Constructed.
Whereas Kenya’s business banking sector spent the post-pandemic years preventing to reinstate meagre switch charges, Safaricom was doing one thing else completely. It was constructing.
The transformation of M-PESA from a easy send-money service right into a full monetary ecosystem didn’t occur in a single second. It occurred in layers, every one quietly making the earlier model of “banking” look extra insufficient. First got here Fuliza in January 2019 — an overdraft facility that lets M-PESA prospects full transactions even when their pockets stability falls quick. No financial institution department. No mortgage utility. No ready interval. Fuliza successfully gave tens of millions of Kenyans their first ever line of credit score, disbursed and repaid completely by means of cellular cash.
Then got here the infrastructure layer. In 2020, Pochi la Biashara launched — a separate enterprise pockets sitting on a dealer’s present M-PESA quantity, permitting the mama mboga, the bodaboda operator, the kiosk proprietor to obtain buyer funds cleanly separated from private funds. No until. No enterprise account. No minimal stability or paperwork. For the primary time, Kenya’s huge casual financial system had a digital accounting instrument constructed to its precise form. Pochi later gained Taasi Pochi — working capital loans based mostly on transaction historical past — and Fuliza Biashara prolonged the overdraft idea to companies working on M-PESA tills.
In June 2021, Safaricom launched the M-PESA Tremendous App — and the ambition grew to become unimaginable to overlook. The app launched a Mini Apps ecosystem: a market of third-party providers embedded immediately inside M-PESA. At launch, Kenyans might ebook SGR Madaraka Specific tickets, buy long-distance bus tickets by way of BuuPass, purchase occasion tickets on Mtickets, entry insurance coverage by means of eBima, and order gasoline by means of Professional-Gasoline — all with out leaving M-PESA. Then got here Mali, a cash market fund constructed into the app in partnership with Genghis Capital. Then M-PESA World — Western Union transfers, PayPal, cross-border sends throughout East Africa, AliExpress funds, a GlobalPay digital card for worldwide purchasing. The platform that began as a technique to ship cash to a relative upcountry was now settling e-commerce in China and processing diaspora remittances from over 170 nations. By its 18th anniversary in March 2025, M-PESA was processing near 100 million transactions each day, with infrastructure able to dealing with 4,000 transactions per second. Monetary inclusion in Kenya had reached 83.7% of adults, up from simply 26.7% in 2006. A major share of that journey occurred due to M-PESA.
All of this, whereas banks had been debating the ethics of a KES 10 switch price.
However M-PESA isn’t completed.
In December 2024 got here Ziidi MMF — a Cash Market Fund accessible immediately from the M-PESA app, minimal funding KES 100, zero transaction charges, no paperwork past your present M-PESA registration. Inside months of its January 2025 public launch it had attracted over KES 7.5 billion in belongings. Kenya has had unit belief funds for many years. The mobile-first, zero-paperwork model took till 2024 — and it didn’t come from a financial institution.
Then, on 5 February 2026, got here Ziidi Dealer.
Launched 5 February 2026
Ziidi Dealer: Purchase & Promote NSE Shares From Your M-PESA App. No Dealer. No Paperwork. Stay Now.
KES 68.50 All-in value to execute a KES 4,500 NSE share buy — 1.52%, inclusive of all expenses & levies
4.3% Energetic participation fee on the NSE — solely 61,000 of 1.4M registered buyers really commerce
Decide In Your complete onboarding course of. No ID add. No dealer approval. No ready interval.
Step 1 — Entry Open M-PESA App → Monetary Companies → Ziidi Dealer.
Step 2 — Onboard Faucet “Decide In.” Welcome message hundreds immediately. No paperwork required.
Step 3 — Commerce Choose an organization from the TRADE tab. Select “Use Greatest Worth” or set a restrict. Enter variety of shares.
Step 4 — Pay Settlement comes immediately out of your M-PESA stability. Immediate. No dealer middleman.
Ziidi Dealer is the second pillar of Safaricom’s Ziidi wealth model. The primary — Ziidi MMF, formally launched in January 2025 — had already accrued over KES 7.5 billion in belongings by March 2025 utilizing the identical frictionless, opt-in mannequin. Ziidi Dealer strikes the needle additional: from passive financial savings (earn curiosity on T-Payments) to energetic investing (personal shares on the NSE), all inside one app already on tens of millions of telephones.
Kenya has had an NSE since 1954. Cellular cash since 2007. Unit belief funds for many years. Frictionless cellular inventory buying and selling with low transaction prices and on the spot onboarding took till February 2026 — and got here from a cellular community operator, not a financial institution, not a fintech startup, not a capital markets regulator.
“Inventory buying and selling is now simpler with Ziidi Dealer. No account. No paperwork. Purchase & promote shares on NSE out of your MPESA App.” — Safaricom buyer SMS, February 2026.
The larger query: If M-PESA could make NSE inventory buying and selling accessible to 37.9 million energetic customers with a single faucet — eradicating each friction level that saved energetic participation at 4.3% — what does that say concerning the transaction charges nonetheless charging a mama mboga KES 7 to ship KES 200?
Learn full evaluation on Tech-ish.com →
Right here’s the total M-Pesa Timeline from 2020 to 2026
Half V: The Case for Going Again — and Going Additional
We already ran this experiment. We ran it nationally, in the midst of a pandemic, with actual cash, actual companies, and actual households below actual stress, and it labored. Each single metric went in the appropriate route.
If we return, there’s no query of whether or not it’ll be sustainable.
When transactions beneath KES 1,000 had been zero-rated in 2020, Safaricom absorbed actual losses. However here’s what has modified since then: M-PESA is not a switch service that expenses per transaction. It’s a monetary ecosystem with Fuliza producing overdraft income, Pochi la Biashara serving the casual financial system, a Tremendous App internet hosting a mini apps market, a Cash Market Fund with KES 7.5 billion in belongings, and a dwell inventory buying and selling platform processing NSE trades. The income base has diversified enormously. The argument that eradicating small-transfer charges would break the enterprise mannequin made extra sense in 2020 than it does at present.
Banks ought to be making the identical transfer. And for completely egocentric causes. The final time transfers between banks and cellular cash wallets had been free, tens of millions of Kenyans moved money from their financial institution accounts to their M-PESA wallets for the primary time. Deposits grew. Buyer numbers grew. If banks are severe about competing in a world the place M-PESA now gives financial savings, credit score, investments, and inventory buying and selling, the minimal entry level is eradicating the friction that retains strange Kenyans from utilizing them.
The edge shouldn’t be the present KES 100. That’s not beneficiant, it barely covers a lot these days. The correct quantity is KES 500 at minimal. KES 1,000, because it was in 2020, can be higher. Extra folks transact digitally. Extra companies settle for cellular cash. Extra of the casual financial system turns into seen and legible. Extra of it turns into taxable in ways in which really work.
And in the event you observe that chain to its finish, you get one thing greater than cheaper M-PESA. You get a extra built-in financial system. One the place the price of taking part within the monetary system isn’t a barrier that the poorest pay most dearly to cross.
Conclusion: Time to let everybody in
We’ve come a great distance with Cellular Cash in Kenya. From easy SMS for cash switch and withdrawals, to the entire ecosystem dwelling in your cellphone. Permitting you to now purchase shares from the identical app you utilize to pay for matatu fare.
However there’s a model of this story that doesn’t sit proper. As a result of alongside all of that ambition and innovation, we’re nonetheless charging a mama mboga KES 7 to ship KES 200 to her provider. A 3.5% price on a transaction she makes each single day. The particular person sending KES 200,000 pays simply 0.05%.
We already know find out how to repair it. 2020 was proof.
Take away the costs on transfers beneath KES 1,000. Make it everlasting this time. Let M-PESA’s expanded income base — Fuliza, Ziidi, Pochi, the Tremendous App ecosystem — carry what the small-transfer charges used to. Let banks, lastly, champion this as a substitute of preventing it, as a result of the final time it occurred their buyer numbers grew. After which watch what follows: extra commerce, extra digital funds, extra financial exercise transferring by means of formal channels, extra of Kenya’s actual financial system changing into seen.
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