Court suspends reintroduction of bank to Mpesa charges

Milimani Law Courts, Nairobi.

It is a blow for Safaricom PLC after the High Court temporarily suspended the re-introduction of the Bank to M-pesa transaction charges. 

Justice Mugure Thande issued conservatory orders directing Safaricom and the Central Bank of Kenya to suspend the coming into effect of the reintroduction of charges for mobile money wallet and bank transactions pending hearing and determination of the case.

The petitioner, Moses Wafula challenged the decision by the CBK to reintroduce the M-pesa charges, a move that was condemned by the members of public due to the harsh financial situation being experienced in the country.

Wafula wants the court to order CBK to produce before court within fourteen days the NO OBJECTION LETTERS issued to Safaricom and Banks in view of the MPESA PAYBILL contracts between Safaricom and the respective Banks.

“If the Banks continue riding on this Mpesa Paybill infrastructure, making money from members of the public, then in the event that this honourable court finds this Mpesa paybill platform to have been operating in contravention of the law, the impact will be higher; more funds from the members of the public would have been lost and it may be a lot more difficult to ask the banks to refund such funds collected from the members of the public,” the petitioner claims.  

According to Wafula, the case illustrates that the engagement between Safaricom and its Mpesa Paybill clients is a bipartite business engagement between the  Safaricom as the Mpesa Paybill service provider and their Mpesa paybill primary clients being the service recipients.  

“Banks and other financial institutions using the Paybill system are classified as Safaricom’s Mpesa Paybill primary clients,” he added.

The petitioner argues that the M-pesa Paybill services being an outsourced service to Safaricom, it has no authority to charge members of the public for a service offered to its contracting service recipients including banks.

Wafula urged the court to order CBK to produce before court within fourteen days; the criteria for authorisation of Mobile to Bank payment services, the list of documents submitted prior to clearance, and other documents specifically illustrating how the best interests of the public were taken care of prior to authorization.