ABSA BANK TO BE CLOSED.
For three years now, banks have not made money on transfers between accounts and mobile wallets.
In an interview with the a local media house, Absa Bank Kenya chief executive Jeremy Awori discussed the risks associated with the Central Bank of Kenya (CBK) waiver and why the banks would even be willing to cut the fees as a tradeoff to have the charges reinstated.
SEVERAL BANKS ARE NOW CALLING FOR A RETURN TO CHARGES ON BANKS TO MOBILE MONEY TRANSACTIONS. DO YOU ALSO SHARE THIS VIEW?
We definitely feel they should now be re-introduced because they were introduced for a specific purpose that was supposed to be temporary to ease the cost of banking for people and to encourage the use of digital currency, which it did.
We saw the volume of transactions shoot up whether it was M-Pesa, whether it was bank-to-bank and I think that was a great initiative.
WHAT IF THE REGULATOR CHOOSES NOT TO RETURN THEM?
I think now we are at a time where we all would prefer they come back. And I think we need to be dynamic over time because if they do not come back, investments in new functionalities in those channels will not happen.
When you are investing in a mobile platform it is based on a return. It is not a free service. The thing that is causing a little worry is that if it stays for long we are going to see innovation and services coming out of the platform reduce.
When you put a business case and say you want to invest Sh500 million and they say how much money are you going to get and you say actually I can’t charge anything, you will simply go somewhere else where you can get a better return.
WILL YOU CONSIDER LOWERING THE CHARGES IF THEY ARE RETURNED?
I think number one we would like to see them come back and then secondly. I think over time we will have to keep reviewing our charges because obviously if the volumes are going up then there will be opportunities for the charges to come down.
As we use automated channels we also find ways of passing on those benefits just as we have done for interest rates. As interest came down we passed on those benefits to customers while still retaining our margins.
I think as an industry we have been losing billions and billions of shillings, but I guess we have to wait for the full-scale integrated reports. I think you have seen what the impact it was for Safaricom, and their numbers.
HOW MUCH MONEY HAVE YOU FORGONE SO FAR?
I think for all banks, especially tier one banks who have large sets of customers, it is running into billions of shillings.