Kenya: Bid to Block Mobile Cash Transfer Companies Flops

Mergers, Acquisitions and Financial Results

An attempt to block four mobile phone operators from offering money transfer services has failed after a judge dismissed the case challenging it. The case challenging the legality of the mobile money transfer was based on the grounds that the four companies do not have licences from the Central Bank.

Eric Orina who filed the case said failure to obtain licence from CBK threatened consumer rights as they would have no recourse in law should their money be lost or interfered with in any way. He argued that as long as there is no law to regulate the mobile money transfer business as operated by Safaricom, Airtel, YU and Orange would be operating in a legal vacuum.

He said mobile money transfer business ought to be regulated and licensed by CBK and not the Communications Commission of Kenya."The operation of service providers are in the province of banking business and are currently undertaken by the four in contravention of the Act, which bars any person who is not licensed from engaging in banking business," he says.

However, the mobile telephone operators argued that Orina was misguided as mobile money transfer services did not in any way fall within the definition of 'banking business'. Judge Gacheche agreed with the four mobile phone service providers that CBK would have no right to supervise them.