High Court suspends bank to mobile money charges


The Central Bank of Kenya in Nairobi. FILE PHOTO | NMG

The High Court has ordered Safaricom and the Central Bank of Kenya to suspend the reintroduction of bank-to-MPesa charges pending the determination of a suit involving financial consumer rights.

The interim order was issued by High Court judge Mugure Thande in a petition filed by a Nairobi resident Mr Moses Wafula who claims that the charges should not be passed to consumers.

The order effectively stops the reintroduction of charges between mobile money wallets and bank transactions as advanced by the CBK through a press release issued on December 6, 2022.

Asking the court to put brakes on the charges, Mr Wafula said should the court find that the Mpesa Paybill charges are illegal more funds from the members of the public will have been lost and it may be difficult to ask the banks to refund the same.

He contends that his rights and those of other members of the public have been violated, infringed and continue to be threatened by the giant telecommunication firm and the Government of Kenya in view of the directive issued by CBK.

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He argues that it is in contravention of the law for the banks to continue riding on the Mpesa Paybill infrastructure and making money from members of the public.

According to him, charges incurred in Mpesa Paybill services are to be paid for by Safaricom’s primary clients such as banks and not the consumers.

The charges were waived on March 16, 2020, as part of the emergency measures to facilitate the use of mobile money at the height of the Covid-19 pandemic.

After the CBK notice on the return of the charges, respective payment service providers and banks announced revised transaction charges before January 1.

Mr Wafula says M-Pesa Paybill services being an outsourced service, “Safaricom has no authority to charge members of the public for a service offered to its contracting service recipients including banks”.

“The petition pending determination illustrates that the engagement between Safaricom and its M-Pesa Paybill clients (such as Banks, Government agencies, Kenya power, DStv, Betting firms, mobile money companies, and other institutions) is a bipartite business engagement between Safaricom as the M-Pesa paybill service provider and their M-Pesa paybill primary clients being the service recipients,” he says.

“Banks and other financial institutions using the Paybill system are classified as Safaricom’s Mpesa Paybill primary clients."

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The Banks being one of the Safaricom’s Mpesa Paybill primary clients also elect to pass the Safaricom Mpesa Paybill charges to the members of the public (the Safaricom clients’ customers),” he argues.

The petition relates to financial consumer rights with a focus on the area of payment services provided by Safaricom Limited in the form of Lipa na M-Pesa Pay Bill Service.

The case will be mentioned on January 23, 2023.

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