Telecommunications firm Safaricom has said that it will need until mid-next year to implement a new directive that requires mobile money providers to disclose transaction fees charged on customers.
The Competition Authority of Kenya has ordered all mobile money service providers to disclose all fees prior to the completion of customer transactions. Some mobile money service providers have committed to have the changes in place by November 14.
In an interview last week following release of its half-year results, Safaricom said that it is committed to making the disclosures but needs time to make necessary changes.
“It is a bit more technically difficult than the banks. The process that we have at the moment is such that it is going to make it a little bit more difficult. So we have to fix the technical issues,” said Safaricom chief executive Bob Collymore.
The new regulations by the CAK require that customers be informed of all fees before a transaction is completed. Currently, customers have to rely on information from the Internet or on posters in agent shops for information. Otherwise, they have to wait until transaction in completed to ascertain the costs incurred.
Safaricom said it was in talks with the CAK over the proposed new deadline.
Airtel Kenya on Monday said it is already making changes on its mobile money platforms to comply with the CAK order.
“Airtel Kenya has complied by effecting some of the proposed changes. Currently we have made available this service on our USSD platform and, therefore, customers are notified of the charges as they carry out their transactions,” said the company’s legal and regulatory affairs director, Ms Joy Nyaga.
The company said it will implement the CAK directive on its Kopa Cash loan, Paybill and Lipa na Airtel services. Some other firms that have made the changes are Faulu Kenya, Branch International and Tala Kenya.
The directive from CAK came within concerns over lack of transparency in the mobile money sector. The Consumer Federation of Kenya (Cofek), a lobby, has previously alleged that mobile money customers are losing money through undisclosed charges.
Last year, the CAK ordered Safaricom to disclose the fees associated with its Lipa na M-Pesa service after it was revealed that some petrol stations were irregularly passing some of the transaction costs to users.
Following this, the company introduced the *234# code through which customers can make enquiries on charges.
Lipa na M-Pesa is meant to be a free service for customers with some merchants, specifically petrol stations being charged a commission that is one per cent of the value of a transaction.
Mobile money is becoming increasingly crucial for doing business in Kenya.
According to the Communication Authority (CA) statistics, there were 26.3 million mobile money subscriptions by June 2016.
The World Bank last year said that three out of every four Kenyans now have access to financial services due, in part, to mobile money and microfinance services.
However, Kenya is still trying to make the use of mobile money services easier and cheaper. Regulations that will accompany the new ICT Policy document are supposed to allow for increased levels over mobile money inter-operability across the networks in a move that is meant to exert downward pressure on prices.
Currently, mobile money subscribers face a relatively expensive procedure if they wish to transfer money to users on another network.