Good day,
Oluwanifemi and Emmanuel here Today we are discussing:
Kenya’s mobile money regulations
Kenyan regulator sanctions two telcos over poor service quality
Carbon financials sneak peek
Kenya’s mobile money regulations
The Central Bank of Kenya is looking to tighten its regulatory reins over digital payments services like mobile money. It has, therefore, released a draft National Payments Strategy for public comments.
Why? Kenya’s mobile money space is, perhaps, one of the biggest success stories across the globe. Since millions move on a daily basis in Kenya, the regulator claims it wants to guard against fraud.
The country’s Treasury Cabinet Secretary is quoted as saying digital payments came with increased risk of fraud and cybercrime and could lead to losses in potential government revenue, customer deposits, and a dip in market confidence.
The background: Supported by some robust regulations and the huge success of Safaricom’s M-Pesa, digital payments in Kenya has been growing in leaps and bounds. The threat of COVID-19 and the waiver on mobile money fees only seems to have increased mobile money transactions.
Between January and November 2019, Kenyans made up to $47 billion worth of mobile money transactions. This feat is all the more impressive considering its population of 56 million. Fun fact : Safaricom’s M-Pesa controls 98% of Kenya’s mobile money market. Airtel Money and other mobile money providers account for just 1.2%.Regulation and growth: With such a deepened digital payments ecosystem, a fair question would be, what kind of regulations fostered such immense growth? Well, there has been several.From the Kenya Electronic Payment and Settlement System (KEPSS), to the NPS ACT of 2011, Kenya has quite a number of regulations that guard its mobile payments space. For the most part, we could deem these regulations successful. What’s changing? The government wants tighter control over digital payments, giving it the ability to influence factors such as pricing and tariff regulations. In a nutshell, it believes these services should be cheaper and more affordable for customers.It is also tightening its telecom influence and is trying to push for more competition in the space. Trouble for Safaricom? This move seems like too much regulatory oversight, considering the space’s recent success. Tighter control on pricing means Kenya’s apex bank can determine how much these companies charge for their services.Safaricom might have to watch its back, considering that the government already wants M-Pesa split from the Safaricom brand, all […]
