The Central Bank of Kenya seeks to ‘tighten its regulatory reigns’ over digital payments services. These digital payments services include mobile money. For that reason, the apex bank has released a draft National Payments Strategy for the public to review and provide feedback.
It appears that Safaricom controls 98 percent of the country’s mobile money market. This monopolisation will not only limit domestic competition, but provide little scope for new players to thrive in the marketplace. In another example, Airtel Money and other money providers account for just 1.2 percent.
The official website of the Central Bank of Kenya said that it “has been developing the National Payments System (NPS) Vision and Strategy. The vision and strategy document has been developed on a consultative basis, with the participation of industry and other stakeholders through various meetings and engagement processes.”
According to Kenya’s Treasury secretary, digital payments have borne the cost of increased fraud risk and cybercrime. This in turn could even lead to loss in government revenue and customer deposits. It is also anticipated to diminish market confidence, media reports said.
During the period between January and November 2019, Kenyans alone accounted for $47 billion worth of mobile money transactions. The figure is noteworthy, especially for a country having a population of 56 million.
In fact, the coronavirus pandemic and the waiver on mobile money fees have deepened digital payments in the country. So it is only fair that the central bank is looking to ensure right regulations in place for a secure financial landscape.