Over a year ago, when Safaricom announced that it would be launching a card specifically for government offices, I did wonder what the difference between Safaricom and other banks really is.

The company recently announced that it is piloting its debit card, designed as a Point-of-Sale (POS) payment card like the bank cards we use. It is designed as an upgrade to the Lipa Na M-Pesa POS solution, where a merchant gets a unique “Buy Goods” number, that customers can use to make payments to the merchant using their mobile phones.

While Lipa Na M Pesa has grown in popularity, it hasn’t been without complaints, key of which are:

  • Lack of transparency around the service charges: At first, consumers assumed that this will work like other POS services where the merchant bears the service charge. This however has not been the case, the customer sometimes will pay, and other times will not, depending on what the merchant opts for when signing up for the service. This lack of transparency has caused discomfort.
  • The service is quite clunky: From my experience, most outlets need to see the transaction text on your phone, to verify if you’ve made the payment. My local supermarket is the only place I’ve seen that has an integrated service where M Pesa payments show up on the cashier’s screen and he just selects yours.

A card will fix the second problem. The first problem is not hard to fix, though I sense reluctance. It would be as easy as a notification text of service charges the same way they do with other M Pesa transactions, or even a notice of charges displayed at the merchant’s premises. It is not rocket science, I am not sure why Safaricom won’t do this. If a customer will be charged for POS use, the onus is on the merchant and service provider to notify them, it shouldn’t be up to the customer to try find out.

On a more holistic level though, is Safaricom just a bank disguised as a mobile operator? As a consumer, I feel Safaricom is replacing and even doing more than banks do:

  • You can deposit and withdraw funds in a wallet that mimics a current account
  • You can save in a wallet that is just like a savings account – M Shwari
  • You can borrow loans
  • You can pay bills, borrow to pay bills etc on the network

Key questions for me are:

  • Are Safaricom’s operations sufficiently ringfenced to protect those that have their financial assets in Safaricom? Of course we know CBA is the bank behind the company, but with about authority and operations? To what extent does Safaricom’s operations as a mobile operator interact with its banking operations?
  • Who is looking out for the consumer when it comes to Safaricom’s financial transactions. Mobile operators fall under the Communications Authority of Kenya, while financial transactions are under CBK. Are there laws that cover mobile operators; financial transactions? I ask this because while Safaricom’s services are convenient and much needed, they are very expensive for the ordinary Kenyan, and I’m not convinced that these services are as expensive to operate.

Finally, as a consumer who has no loyalties anywhere, I can’t help but wonder why the number 2 mobile operator is still struggling to establish itself in Kenya. The market could do with more competition, the consumer will be better for it.

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