Telecoms operator Safaricom’s #ticker:SCOM mobile money agents will soon start using photos to identify those withdrawing or depositing money on the popular M-Pesa platform in a new push to curb fraud.
Safaricom said it has distributed about 25,000 pre-programmed smartphones to its mobile money agents to be used in registration of new SIM cards.
The process involves capturing faces of SIM card owners and storing digital copies of the same for retrieval during M-Pesa transactions.
Safaricom, which has 28.1 million registered customers and 19 million active M-Pesa users, said the special phones in use for registration are linked to the Registrar of Persons’ database, helping verify the data as it is fed into the system.
Safaricom says the digital database, which is also being populated with photos of existing subscribers, should ease service delivery as agents and customer care representatives need not ask for proof of identity prior to allowing a transaction.
The Business Daily has established that M-Pesa agents will be conducting all transactions through the company-issued mobile phones, allowing them to validate the national ID card details presented to them and the person doing so.
“Using an application in the phone, the agent keys in the customer’s registration details then takes a photo of the documents and the person registering,” Stephen Chege, Safaricom’s corporate affairs director, told the Business Daily.
“The big win from this process is the photo evidence of the person registering. This will eliminate use of stolen personal identification documentation to commit fraud,” Safaricom says.
The law requires telecoms firms (or their appointed agents) to register SIM card owners after noting down their “full name, identity card number, date of birth, gender, physical and postal address.”
Safaricom, however, seems to be using the new registration format to enhance its database and lift its customer security levels to those of commercial banks.
M-Pesa has been the target of fraudsters who explore loopholes in its processes to steal money from customers.
Fraudsters have used different methods, including stolen or forged national identity cards, to register different M-Pesa accounts and use the same to steal funds from other people’s M-Pesa accounts.
Besides, conmen have called customers to inform them that they have won some money in a competition and through a series of instructions shepherded unsuspecting users to the point of sending money to the fraudsters as a prerequisite to accessing their winnings.
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Fraudsters have also got some customers to reveal year of birth (which is often but insecurely used as PIN numbers), ID numbers and a few recent transactions and used the information to draw funds from their M-Pesa accounts.
In 2011, a convicted criminal serving time at the Kamiti Maximum Prison, forged an ID card belonging to retired Chief of the Kenya Defence Forces (KDF), General Jeremiah Kianga. The fraudster conned Kenyans off thousands of shillings via mobile money with the promise of enrolling them in the army.
Last March, police in Eldoret arrested a man suspected of stealing over Sh180,000 from mobile money agents in Nandi using dozens of stolen SIM cards and ID cards, which were used to register M-Pesa lines.
The failure by some mobile money agents to countercheck the identity of a customer with that on the ID card presented often leads to fraudulent withdrawals from customers’ accounts.
“This (photo capture process) will translate to better data integrity, adding to the security of M-Pesa services as well as other value-add services which are dependent on customer identification,” said Mr Chege.
Rise in M-Pesa deposits
In the year to March, the telecoms firm recorded Sh1.84 trillion in M-Pesa deposits compared to withdrawals of Sh1.6 trillion – demonstrating to the volumes of money trading on this platform.
Safaricom, which has 135,500 agents across the country, made Sh55.1 billion in revenue from the platform in the year to March, a 32.7 per cent year-on-year growth.
Other transactions like Lipa Na M-Pesa, gaming, M-Shwari, KCB M-Pesa, and airtime purchase accounted for Sh1.8 trillion while person-to-person transfer recorded Sh1.6 trillion during the period under review.
This growth has necessitated the telecoms firm to introduce steps to improve the platform, including a feature that allows customers to preemptively cancel mobile money payouts to an unintended user.
Safaricom is currently undertaking an upgrade of the M-Pesa system – the third of its kind in 10 years – to enable the rollout of more features, including automated functions, on the platform.
Additional reporting by Salaton Njau