Members of Parliament have been pushing hard on the split of mobile money transfer services particularly M-Pesa from its parent telecommunication company Safaricom so that they can operate as separate businesses through The Kenya Information and Communications (Amendment) Bill 2019 which will soon be up for debate. But the Ministry of ICT, Central Bank of Kenya (CBK) and Communications Authority of Kenya (CA), has warned against their quest for the split.
“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,” said ICT principal secretary Jerome Ochieng.
The Bill provides that in addition to operating a telecommunication system or providing a telecommunication service as may be specified in the licence granted under section 25, a person may engage in any other business provided that such person shall obtain the relevant licences from the respective regulators of any industry legally split or separate the business from such other business and provide separate accounts and reports in respect of all businesses carried out.
Failure to which the offenders will be slapped with a fine not exceeding ten million shillings or to imprisonment for a term not exceeding two years, or to both. This means that the telecommunications regulator will be compelled to ensure that mobile money services are licensed as banks, and the firms are licensed to only offer voice, data and SMS services.
Narok MP questioned why Safaricom cannot split M-Pesa into banking services, faulting it for breach of personal data and perpetuating fraud.
CBK Governor explained that financial services are not linked with telcos but they are revenue sources for the telcos because they provide a service adding that 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. If the telco goes under or faces whatever risks, it is not a 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,” he said.