Kenyan regulators oppose parliamentary attempts to split mobile money from telecoms services

Kenya’s communication and financial sector regulators have warned against parliament’s quest to split mobile money transfer services off from telecoms operators, Business Daily reported. The Ministry of ICT, Central Bank of Kenya (CBK) and Communications Authority of Kenya (CA) on 10 July asked lawmakers to be cautious in their effort to de-link services such as M-Pesa, Airtel Money and T-Kash from their parent mobile telecommunication firms.

The warning comes as MPs prepare to debate the Kenya Information Communications (Amendment) Bill 2019, which seeks 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 telecoms 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 told MPs the proposal should be thought through properly before a decision is made. Senator Ledama Ole Kina asked the ICT ministry, CBK and CA to explain why Safaricom cannot be split, saying money services should be treated as banking services. The 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.

Ochieng asked senators to step back and reflect on the origin of M-Pesa. 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 telecom firms, he said, adding that it is a separate trust that holds the money that is secure in a commercial bank.

Source: Telecom Paper