Safaricom probed over costly M-Pesa outage


A woman withdraws money from an M-Pesa outlet in Nyeri town. FILE PHOTO | JOSEPH KANYI

Safaricom #ticker:SCOM is being investigated for the Saturday outage of its M-Pesa service that left millions of customers unable to receive or send money.

The blackout is estimated to have cost the economy billions of shillings.

Information, Communications and Technology (ICT) Cabinet Secretary Joe Mucheru ordered the Communications Authority of Kenya (CA) to work with the Central Bank of Kenya (CBK) to establish causes of the outage.

During the outage that lasted several hours, Safaricom customers had problems paying for electricity bills, shopping, sending money to relatives, and even placing bets with gambling firms.

Safaricom faces sanctions given the regulator does not accept interruptions of more than one hour.

“The ministry has instructed the CA to liaise with the CBK and investigate the cause of this outage and forward a report to government, including remedial measures Safaricom will take to ensure such an outage does not happen in the future,” Mr Mucheru said in a statement on Sunday.

The network outage began at about 6.30pm and persisted beyond 11.30pm.

Safaricom attributed the hitch to a database problem.

Safaricom is estimated to have lost billions during the near six-hour outage whose ripple effects on the economy were huge.

CA statistics show that about Sh1.5 trillion moved through the M-Pesa platform in the three months to June, translating to an average Sh16.3 billion per day or about Sh679.3 million every hour.

M-Pesa agents were among the biggest losers in the blackout that stalled their business for hours. Multiple banks have hooked up their systems to M-Pesa.

The Sh1.5 trillion accounted for 79 percent of overall mobile money transfer in the quarter to June.

Safaricom could also be fined if found in breach of regulations. The value of the fine is decided by the CA’s board and could be as low as Sh500,000 or as high as 0.2 per cent of gross annual turnover.

Similar outages were experienced in July and April last year putting the company under regulatory pressure.

Mr Mucheru asked mobile money users to register with other networks to ease risks.

“Even as we ensure mobile service providers give uninterrupted service, we urge mobile money users to have redundancies to guarantee continued services,” Mr Mucheru said.