The Central Bank of Kenya (CBK) on Tuesday said it has revoked the licence of payments service provider Mobile Pay Limited (MPL) whose service brand name is Tangaza over failures to remedy regulatory breaches.
CBK said the firm had repeatedly failed to submit compliance reports including audited financial reports as required by the financial regulator.
“This action culminates a long engagement between CBK and MPL, during which CBK has considered MPL’s continued violations of NPS (National Payments System) law and regulations,” said CBK in a statement.
“MPL has persistently failed to discharge its statutory obligations, among others, non-submission of audited annual Financial Accounts of the Trust Fund (Tangaza Trust) and MPL, non-submission of annual systems security audit report, and non-submission of quarterly reports for CBK’s oversight.”
The banking regulator said while the firm was granted sufficient time to address its violations, its compliance has continued “to deteriorate,” putting customer funds at risk. CBK did not state the amount of funds at risk.
The regulator however said that the conduct of MPL and its Trustees could erode public trust, and the revocation of MPL’s authorisation as a Payments Service Provider will protect the interests of its customers and maintain confidence in the National Payment System.
“CBK has taken over control of the business of MPL to safeguard and facilitate distribution of the money in the Trust Fund,” it said.
“CBK will undertake a reconciliation of MPL customers’ balances against the Trust Fund accounts, and then commence reimbursing the customers.”
MPL is the smallest of the four mobile Payments Service Providers in Kenya, with less than 0.01 per cent of total mobile money subscribers according to the regulator. A spot check by Business Daily showed the website belonging to the firm went down soon after the regulator’s announcement.
It has been operating since 2011 with Oscar Ikinu, listed as its co-founder and managing director. Business Daily could not immediately reach MPL for comment by press time as their phones went unanswered.
“While we continue with mobile money services as our core business, our customers will also access voice, data, and SMS services,” Mr Ikinu was quoted saying earlier when the firm was granted a mobile virtual network operators (MVNOs) licence by the Communication Authority (CA).