Regulation to force phone operator Safaricom to open up its mobile money offering M-Pesa to other payment service providers is on the cards in Kenya.
The Central Bank of Kenya (CBK) is pushing for regulation that could end Safaricom’s dominance in the East African country’s mobile money market.
In 2007, Safaricom, which is owned by UK-headquartered Vodafone, launched the M-Pesa mobile money system in Kenya.
Since then, M-Pesa has taken off in Kenya, with around half a trillion transactions made for the year-ending June 2012 while over $2.8 billion in deposits have been recorded, according to one of the creators of Kenya’s M-Pesa system Susie Lonie.
Other operators and even banks have launched mobile money systems in Kenya, such as Indian headquartered telecoms firm Bharti Airtel together with Equity Bank.
But there has been a lack of interoperability among mobile money systems in the country, and concerns exist that Safaricom’s dominant 70% share of the country’s mobile market could be shutting out other players and hurting consumers.
As part of its ‘National Payment System Draft Regulations’, the CBK then has recommended that all electronic-money issuers in the country should use open systems capable of becoming interoperable both locally and internationally.
“E-money issuers are encouraged to enter into interoperable arrangements ,” reads the CBK’s recommended regulation.
Safaricom has reportedly opposed similar calls in the past.
Yet, the telco has not provided in-depth comment on the CBK’s latest proposed regulations.
"All stakeholders including ourselves are keen to support the CBKs initiative to strengthen the e-payments policy environment," Safaricom has said in a statement.
The public have until October 18 to make their recommendations regarding the proposed regulations.
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