CS Mucheru seeks to level mobile cash market

Proposes that CBK comes up with regulations on fees surcharges for cross-platform transfers

In Summary
  • CS wants to reduce 'club effect’ currently enjoyed by Safaricom as the provider of the largest platform
  • Launched in 2007, Mpesa has since expanded to Tanzania, Mozambique, DRC, Lesotho, Ghana, Egypt, Afghanistan, South Africa and Ethiopia.

Information, Communication and Technology Cabinet Secretary Joe Mucheru wants telecommunications service providers to charge uniform fees for mobile money transactions.

In a move to curb Safaricom's superiority in mobile money payments, Mucheru proposed that the Central Bank of Kenya comes up with regulations on surcharges for cross-platform transfers.

“This is likely to benefit smaller mobile money providers as it would reduce the club effect currently enjoyed by Safaricom as the provider of the largest platform,” he stated.

The CS, who was before the Senate Committee on Communication, Information and Innovation Operators on Wednesday, said operators should apply the same fee structure and level on transfers to registered and unregistered users.

The fee for cross-platform transfers should include that for cash withdrawal at an agent.

“It would also be desirable to set up a system under which mobile money agents can support multiple mobile money platforms using a single float,” he said.

Senators had asked the CS to highlight legislative or policy interventions necessary to enable the Central Bank of Kenya through the Ministry of National Treasury and Planning to strengthen mobile money interoperability.

Nominated MP Abshiro Halake said senators were not out to penalise Safaricom's investments and successes.

“We are here to ensure a level playing field is created because ultimately, it is the consumers who will benefit,” she said.

Safaricom is behind M-Pesa, the country's biggest mobile banking service that allows users to store and transfer money through their mobile phones.

It was launched in 2006 and has since expanded to Tanzania, Mozambique, DRC, Lesotho, Ghana, Egypt, Afghanistan, South Africa and Ethiopia.

Since its launch, M-Pesa and related products share in the market has grown from 26 per cent in 2006 to over 82.9 per cent currently.

In his responses, Mucheru further said they have also been urging Kenyans to as well register with other mobile money providers.

“It is not something that we should be doing as a government but you realise that when Safaricom is undergoing routine maintenance, lots of people get stranded. It is therefore prudent that people have alternatives,” he added.

The ICT ministry through the Communications Authority is required to regulate competition in the sector and protect consumers.

This is done by carrying out regular market analysis and coming up with targeted interventions.

The authority also regulates competition in the sector with the aim of ensuring a level playing field and service affordability through tariff regulation, interconnection regulation, sector analysis and enforcement.

When he appeared before the same committee on Tuesday, Safaricom CEO Peter Ndegwa fought off accusations that the company engages in unfair competition and told rivals to invest in infrastructure development and innovation.

He said his company has not undertaken any activity that has lessened or in any way affected the ability of competitors to do well.

Rival Airtel Kenya had told the committee the information and communications technology market in the country does not enjoy fair competition.

Airtel Kenya said there has been no dispute as to the status of Safaricom as regards its dominance status and market power.


-Edited by SKanyara

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