Members of Parliament are pushing for the delinking of mobile money services from telecommunication firms and their registration as separate commercial banks in a move that could alter the competition landscape for digital cash providers.
If MPs have their way, the telecommunications regulator, the Communications Authority of Kenya (CA), will be compelled to ensure that mobile money services like Safaricom’s M-Pesa, Airtel Money and Telkom’s T-Kash are licensed as banks.
The telecommunication firms will then be licensed to only offer voice, data and SMS services.
ICT Committee
Senate Deputy Speaker Kithure Kindiki has tasked the committees on ICT and that of Finance and Budget to jointly scrutinise a statement filed by Narok Senator Ladema ole Kina, asking the committees to inquire and report on various aspects of financial services being offered by the telecommunication firms.
It is not the first time that Parliament is seeking to have mobile money services brought under full regulation of the Central Bank of Kenya (CBK).
Tighter regulations
Banks have been quietly pushing for tighter regulation of the mobile money space, arguing that lighter rules had enabled the telcos to offer services at a much cheaper rate and higher speed than they can.
The telecommunication firms have, however, argued that tighter regulation will stifle innovation, roll back the gains made in deepening financial inclusivity as well deny customers the efficiency associated with mobile money.
The National Assembly’s Information, Communications and Technology (ICT) committee chaired by Marakwet West MP William Kisang early this month directed the CBK to publish regulations that will see interest rates charged by more than 500 unregulated digital micro-lenders controlled by the banking sector watchdog.
Safeguards
The Senate’s ICT and Budget committees will inquire into safeguards to ensure lending services by telecommunication companies do not bring down the economy in case companies collapse or shut down.
“The committee should state whether financial services being offered by the telecommunications companies can be delinked from those companies and registered as financial companies,” Mr ole Kina said.
Data protection
He also wants to know whether measures have been put in place to ensure consumer data obtained by the mobile telecommunication companies and other companies using the mobile platform for financial promotions don’t fall in the hands of criminal entities or being used for identity theft.
“The committee should explain whether mobile telecommunication companies can set up a mechanism to alert mobile phone users when their national ID numbers are used to register a new phone number,” the Narok lawmaker said.
He is also seeking to know if mobile telecommunication companies and third parties such as banks have a safe data-sharing platform between each other for protecting the consumers, such as reversal of erroneous financial transactions.