Kenyan telecommunications giant Safaricom has announced a significant change to its mobile money service, M-PESA. Effective February 5th, 2024, you will no longer be able to send or transfer money to individuals without registered M-PESA accounts.
This development has sparked both interest and debate, with many questioning the motivations behind it. According to TC Report, "the move will also affect unregistered mobile money users on Airtel Money and T-Kash." T-Kash is a mobile money service own by Telkom - Kenyan's third-biggest telecommunication company.
While Safaricom has not explicitly stated the reason for the change, security concerns are widely believed to be the driving force.
Unregistered SIM cards, often linked to unregistered M-PESA accounts, can create channels for untraceable money movement, potentially facilitating criminal activities like money laundering and fraud.
Hence, limiting transactions to registered users, Safaricom aims to enhance transparency and accountability within its mobile money ecosystem.
This decision aligns with wider efforts by Kenyan authorities to combat financial crime. In 2023, the Central Bank of Kenya (CBK) issued regulations requiring all mobile network operators (MNOs) to verify your SIM card identity.
Safaricom's move can be seen as a proactive step towards complying with these regulations and demonstrating its commitment to responsible financial practices.
However, the change also raises concerns about potential impact on certain user groups. Individuals without formal identification documents, such as refugees or those residing in remote areas, may face challenges registering for M-PESA, potentially limiting their access to essential financial services.
Meanwhile, Safaricom has acknowledged these concerns and has stated that they are working on alternative solutions to ensure financial inclusion for all.
The impact of this policy shift remains to be seen. While it undoubtedly enhances security, it's crucial to strike a balance between safeguarding financial systems and ensuring accessibility for all.
Safaricom's approach in the coming months, particularly their efforts to address potential exclusion, will be closely monitored by industry stakeholders and users alike.