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Safaricom accused of defrauding Lipa Na M-Pesa users

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Safaricom CEO Bob Collymore (right) during the launch of Lipa Na M-Pesa service.

Safaricom, the region’s most profitable company and leading mobile operator in the region, has been accused of running its popular utility payment service, Lipa Na Mpesa, without a full disclosure to customers on its charges.

The Competition Authority of Kenya (CAK)  today ordered Safaricom to disclose fully and educate citizens on the hidden charges that they bear by using ‘Lipa Na Mpesa’. The service is becoming popular as many Kenyans use it to settle utility bills as water, electricity, fueling at petrol stations and even when buying goods and services. There are 31 million mobile phone users, 70 of whom are controlled by Safaricom, which in turn has close to 20 million on its M-Pesa platform.

Competition Authority Director General Wang’ombe Kariuki says it has come to the attention of the agency that Safaricom has been levying hidden charges to users of the service. In one instance, Kariuki has directed Safaricom to inform Kenyans that settling bills through Lipa Na Mpesa service at petrol stations currently may attract a fee of 0.5% of the transaction value.

“After taking investigations pursuant to consumer protection mandate, we order Safaricom to undertake a campaign in both electronic and print media to sensitise Kenyans on Lipa Na Mpesa billing,” he said in a statement.

The move, he said, is meant to protect consumers from exploitation.  It has also been required to show how Kenyans can see the charges to be levied first before committing to the transaction.

But its dominance is to be put to test when Equity launches a platform that offers similar services under the name Equitel.  There are fears its popularity will substantially diminish in the mobile-money transfer market where Ksh2.37 trillion is transacted. (tuko.co.ke)



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