The rivalry that has been brewing in the mobile money industry in Kenya has gained momentum recently.
Safaricom, the telecommunications provider behind the extremely successful M-Pesa mobile money service has been taken to the Competition Authority of Kenya (CAK) by rival company Airtel, who are complaining of unfair practises with regards to M-Pesa’s fee structure.
They have accused Safaricom of charging higher transaction fees for money that is sent from M-Pesa to other platforms including Airtel Money. For example, it costs Sh237 to send Sh20,000 from M-Pesa to Airtel Money while transferring the same amount to another M-Pesa user costs only Sh55. In addition to this M-Pesa only offers its service through its own agents
Safaricom responded to Airtel’s accusations with an offer to negotiate a settlement out of court. An out of court settlement has the potential to be worth millions of Kenyan shillings, based on the profits M-Pesa has made at the cost of rival services.
While the CAK will allow an out of court settlement, Airtel says they want more than just monetary compensation. They want to put a stop to the restricted access to M-Pesa. They would also like the regulator to impose a financial penalty “as a deterrent against engaging in such practices in future.”
Safaricom has historically argued that M-Pesa is a proprietary product and they should not be penalised just because it is successful.