Safaricom Vs. Equitel

Safaricom has raised charges for the transfer of funds from customers’ bank accounts to third party M-Pesa wallets, sealing a loophole that lenders have been using to bypass the mobile phone company when sending money but it is also a move seen as aimed at rivaling the new entrant into the market, Equitel.

The move by Safaricom also comes at a time when banks are working on mobile phone based payments system called Real Time Interbank switch.

The KBA platform is also seeking to eliminate the need for banks to use M-Pesa in the business-to-consumer transactions and by extension, this is prone to bring competition in the mobile cash transfer sector and reduce the cost of sending money, the sector which Safaricom is a giant.

Safaricom has alleged that the direct transactions from bank accounts to third party mobile wallets could be used to perpetuate fraudulent transfers and facilitate criminal activities such as funding terrorism though there is no substantive proof.