Isn’t It Time Safaricom Admitted It Is A Bank?

This morning I heard on Nation FM that Safaricom is planning to launch a debit card that will enable users pay for online government services with ease. According to this article on Business Daily, these cards will go hand in hand with Safaricom POS’ in government offices and the company is basically going head to head with commercial banks which currently collect government revenues.

I am all for as many players as possible because competition always means better service. I’m however concerned that the Mobile Network Operator (MNO) is slowly becoming a bank without requisite regulation.

A couple of weeks back there was a lot of noise online when many Lipa Na M Pesa users realized that while the bills and merchant payments solution is marketed as a free service by Safaricom, it is not all free. Worse still, the charges are not uniform across the board, and a customer has no way of knowing how much a transaction will cost until after making the payment. For example, paying a power bill and depositing cash into my account via Paybill may not cost the same even for equal amounts.

Now if Safaricom were a bank, it would be obliged to display all charges on its website and all its agents and merchants would be required to disclose if transaction costs were going to be passed onto the customer, giving the customer a chance to make a choice on whether to use the payment medium or not. This is not happening.

While I do not know if the debit cards will be linked to a commercial bank, I cannot help but feel the regulator needs to step in, if for nothing else to protect the customer from hidden charges and misinformation.