Companies

Safaricom denies infringement claims over banking platform M-Shwari

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Commercial Bank of Africa managing director Isaac Awuondo (left), Finance minister Njeru Githae (centre) and Safaricom's chief executive officer, Bob Collymore at the launch of the mobile banking service M-Shwari in Nairobi, November 27, 2012. Microfinance institution Faulu Kenya this week filed a suit against Safaricom, claiming that the leading telco copied the product’s idea from them and sought a temporary injunction halt its use. SALATON NJAU

The stage is set for a bruising court battle between a leading mobile company and a microfinance institution on alleged copyright infringement involving the recently launched M-Shwari, a virtual banking platform.

Faulu Kenya this week filed a suit against Safaricom, claiming that the leading telco copied the product’s idea from them and sought a temporary injunction halting its use.

(Read: Safaricom stole our idea to roll out M-Shwari, Faulu Kenya says)

The deposit-taking financial institution alleges it had proposed to enter into a partnership Safaricom to deploy a similar product, including preparation of a concept paper detailing how it was going to operate.

Further, Faulu Kenya alleges the two parties signed a non-disclosure agreement, which it claims Safaricom disregarded.

On Thursday, Safaricom denied these claims saying it not only fully owned the product, but that its conceptualisation was done fully within the law.

“Safaricom Ltd seeks to clarify that M-Shwari is a proprietary product of Safaricom Limited which is the successful result of a 2-year product development process,” the mobile firm noted in a statement sent to media houses.

“While the allegations are lamentable and unfortunate, Safaricom will seek to have the matter resolved through the right legal processes and we believe that this law suit is tainted with malice because it is founded on untrue allegations.”

M-Shwari was launched late November in partnership with the Commercial Bank of Africa (CBA) accessible by Safaricom’s subscribers under its M-Pesa service menu.

Subscribers will be able to save between Sh1 and Sh100,000, the maximum deposit on M-Pesa, and earn an interest of between two and five per cent.