Kenya: M-Pesa Fraud Losses Less Than One Percent - Safaricom

Mergers, Acquisitions and Financial Results

Safaricom yesterday said losses occasioned by fraud arising from its money transfer M-Pesa are negligible compared to credit card fraud.

Chief executive Bob Collymore said the money lost in M-Pesa fraud averages 0.006 per cent of the amount transacted which currently stands at Sh2 billion daily.

The firm said losses to customers are at around 0.002 per cent while fraud losses to agents stand at about 0.007 per cent. The key form of fraud used is trickery.

Collymore said this loss rate is low compared to an estimated 5 per cent losses in credit card fraud as indicated by the Central Bank of Kenya.

M-Pesa carries about two million chargeable transactions a day and four million are airtime purchase transactions.

Collymore also pointed out that the platform has a 99.5 per cent of uptime (the time the service is working and available) as of February. There have been continuous complains from M-Pesa users over the service being down from time to time.

Safaricom is moving to reassure businesses to join its pay-bill system. It has enlisted about 600 businesses so far.

Yesterday it launched a partnership with mobile payments solution provider Kopo Kopo and Eat Out, the local restaurants online directory, targeting to reach local hospitality industry.

This will enable restaurant patrons to conveniently pay their bills via M-Pesa. Kopo Kopo will customise the way restaurant owners want to be receiving their money through M-Pesa at a commission rate of 1.5 per cent per transaction.

"As a restaurant owner, you are assured that 7-8 out of every 10 customer has M-Pesa," said Ben Lyon, Director of Kopo Kopo.

Restaurants join a list of other services providers ranging from utility providers, Pay-TV providers, schools and supermarkets that accept mobile money payments.

The reassurances by Safaricom comes as Central Bank is proposing to start investigating all mobile money transfer services above Sh300,000 a week in a move to fight money laundering and stop the risk of terrorism financing.

"We are working on a detailed response. It is a consultative process. But I can say we are willing to work with CBK to fight money laundering," Collymore said.

The current maximum allowable transaction on mobile money transfer is Sh980,000 a week.