• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
ClickPesa

ClickPesa

Media

  • How does it work
  • Pricing
  • Solutions
    • e-Invoice
    • In-Store / Web Payments
    • Bulk Payouts
  • Customer Support
  • Knowledge Base
  • Login / Sign Up
Login

Lowering SME banking charges in Kenya

October 13, 2019 by clickpesa

The number of SMEs in Kenya discovering the benefits of digitizing payments within their organization is increasing. Apart from using a mobile money account such as M-pesa, SMEs often also hold a bank account under one of the available banks in Kenya for several reasons. Although opening a bank account is done within a couple of days many SMEs are not fully aware or don’t understand the banking fees and banking charges in Kenya related to using and maintaining a bank account. Being aware of the different banking charges can lower banking charges and save SMEs money.

Banking charges

Often entrepreneurs opening a bank account for their SME only discover the full cost involved while using the bank account for withdrawals, deposits and requesting statements. FSD Kenya proves that doing a comparison between different banks before opening a bank account pays off and can save cost. With the Kenya Finance Act that came in place in 2018 banking charges even increased, making it more important and lucrative to do a banking charge comparison among banks for having a bank account under them. The act itself introduced a 20% excise duty rate on fees charged on money transfer services by banks and other fees charged by financial institutions. It also increased excise duty on fees charged on similar money transfer services by cellular mobile phone service providers to 12% up from 10%. When looking to open a bank account as a business it is only not so easy to compare the banking charges between different banks. 

Price Transparency

Between banks in Kenya there is lack of standardised tariff information and how pricing should be organised and presented. In addition within banks itself there is confusion over the cost of different banking products and services. FSD Kenya’s research concludes that most bank staff were familiar with the cost of basic transactions, such as withdrawal and monthly ledger fees, but not for more complicated transactions such as the cost of bank-to-mobile wallet transfers, costs of mobile banking when using the bank’s app versus using the bank’s paybill, salary processing fees, transfers between different banks, etc. 

Type of Costs

Comparing banking charges between banks for a SME bank account does pay off and lowers cost. When doing a comparison it is important that there is a good understanding of the type of banking charges that are associated with a bank account. Below is an overview summarizing the banking charges for opening, using and maintaining a bank account in Kenya

 

Type Type of charge Cost 
1. Opening a bank account One-off Ledger fee

Minimum opening balance

New ATM card

2. Withdrawals Per transaction ATM withdrawals

ATM withdrawals

OTC withdrawals

Withdrawal to mobile

Agent withdrawals

3. Bank Transfers Per transaction Bank-to-mobile

Cheque

EFT

RTGS

4. Maintenance Monthly Ledger fee

Mini-statements OTC

ATM card replacement

5. Closing a bank account One-off Closing fee

Ledger fee

Final cash withdrawal (OTC)

6. Switching bank account One-off Closing an account

Opening an account

For a successful comparison it is important to take into account the frequency of usage in terms of transaction. The number of transactions needs to be multiply by the cost of the transaction to determine the cost of withdrawals and bank transfers. Some banks have a higher banking charge for opening a bank account but they charge a lower monthly maintenance cost and transaction cost, making it overall cheaper. By calculating the cost for each banking charge type, the total sum of cost per year can be calculated. Doing this for different banks gives eventually an overview telling which bank is most competitive is terms of pricing.

Category iconBanks,  Bulk Payments,  Cross Border Payments,  Forex,  Mobile Money,  Payment Acceptance,  Research Tag iconBank Payments,  banking charges,  Banks,  East Africa,  Kenya,  Mobile Money,  Mobile Wallet,  Money Exchange

Primary Sidebar

Open an account for your organization

Create your ClickPesa account, connect your bank or mobile money account within seconds. Start to receive and make payments.

Recent Articles

7 Reasons Why You Need Payment Automation For Your Business Growth.

October 20, 2022

What is payment automation? Businesses can make … [Read More...] about 7 Reasons Why You Need Payment Automation For Your Business Growth.

5 reasons companies should accept multiple payment methods in Kenya

September 10, 2022

With the digital economy evolving rapidly, … [Read More...] about 5 reasons companies should accept multiple payment methods in Kenya

Benefits of electronic invoicing

July 29, 2022

Electronic invoicing, which is also known as … [Read More...] about Benefits of electronic invoicing

The future of digital payments

June 6, 2022

The 21st century gift of the internet has … [Read More...] about The future of digital payments

Create your account


Login / Sign Up



Subscribe to receive our latest updates


Footer

Legal

  • Terms and Conditions
  • Privacy Policy
  • Data Retention Policy

Company

  • About Us
  • Our Leadership
  • Contact Us
  • Jobs
  • Insights
  • Investors

Solutions

  • e-Invoice
  • In-Store / Online Payments
  • Bulk Payments
  • Payout Services

Social Media

  • Facebook
  • Instagram
  • LinkedIn
  • Medium
  • Twitter
  • YouTube

Address

Tanzania Office
Victoria Place, Kibisho Street, 102, Dar es Salaam

UK Office
71-75 Shelton Street, London, Greater London, United Kingdom, WC2H 9JQ

clickpesa-logo-vertical

DLT CP TANZANIA COMPANY LIMTED TRADING as CLICKPESA TANZANIA is licensed by Bank of Tanzania (BoT) under the Payments System Licensing and Approval Regulations 2015, License No: NBPSL No. 0000-31, to provide Payment System Services in Mainland Tanzania as well as Tanzania Zanzibar.

Clickpesa Limited is registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), MSB Registration Number: M22615243, dealing in money transfer and virtual currencies.




© ClickPesa Limited – All Rights Reserved