- If MPs have their way, the telecommunications regulator will be compelled to ensure that mobile money services are licensed as banks.
- The telecommunications firms will then be licensed to only offer voice, data and SMS services.
Mobile and financial sector regulators have warned against Parliament’s quest to split the popular money transfer service, M-Pesa, from telecoms giant Safaricom #ticker:SCOM.
The Ministry of ICT, Central Bank of Kenya (CBK) and Communications Authority of Kenya (CA) Wednesday asked MPs to be cautious in their push to de-link mobile money services such as M-Pesa, Airtel Money and T-Kash from their parent mobile telecommunication firms.
The warning comes even as MPs prepare to debate the Kenya Information Communications (Amendment) Bill, 2019, that is seeking the registration of mobile money services as separate business units.
If MPs have their way, the telecommunications regulator will be compelled to ensure that mobile money services are licensed as banks. The telecommunications firms will then be licensed to only offer voice, data and SMS services.
CBK governor Patrick Njoroge, ICT principal secretary Jerome Ochieng and CA director-general Francis Wangusi on Wednesday told MPs the proposal should be thought through properly before a decision is made.
“A lot of investigations need to go into this before we make any decision to de-link.
“Our opinion is that this needs to be thought through properly and see the pros and cons of either de-linking them or making them stay together,” Mr Ochieng said in response to demands by Narok Senator Ledama Ole Kina.
Mr Ole Kina pushed the ICT, CBK and CA to explain why Safaricom cannot be split, saying money services should be treated as banking services.
The Narok legislator said the use of national identification cards to carry out M-Pesa transactions has perpetuated identity theft by unscrupulous players. The senator claimed that the use of M-Pesa has led to loss of personal data, with lost Identification Cards being used to register Sim Cards.
But Mr Ochieng asked Senators to step back and reflect on the origin of M-Pesa.
“Safaricom was originally telecommunications company but M-Pesa came as one of its innovations. The ICT Ministry appreciates such innovations.
“If we split M-Pesa from Safaricom, will we be encouraging innovation or stifling it?” the PS asked.
Dr Njoroge said there are no risks to the economy with the current arrangement. “M-pesa or any other money in the mobile wallet does not sit in the balance sheet of the telcos. It is a separate trust that holds the money that is secure in a commercial bank,”Dr Njoroge said.
“If the telco goes under or faces whatever risks, it is not significant risk in terms of financial sector operations. But there will be shocks, we can’t always eliminate these risks just like a bank going under.” Dr Njoroge said.
He said financial services are not linked with telcos but they are revenue sources for the telcos because they provide a service.