Safaricom has sued East Africa Data Handlers in a case that the operator claims saw it lose KES 20.3 million following a breach of contract by the IT company.
According to Business Daily, Safaricom sought the services of EA Data Handlers to manage the carrier’s mobile payment platforms: Lipa na M-PESA and Buy Goods.
The products, which have significantly increased Safaricom’s revenues from M-PESA since they were launched in June 2013, saw Safaricom lose the amount reported in what the telco says was EA Data Handler’s fault.
The case, which will be mentioned on Feb 19, cites details such as Safaricom’s original arrangement with the IT firm. EA Data Handlers was tasked with data management and recovery in early 2016.
The company was also responsible for onboarding merchants onto the mobile money payment products. The exercise saw East Africa Data Handlers receive unknown amounts of cash from transactions processed through the platform.
Now, sometime in late 2018 or early 2019, the data handler reportedly failed to reconcile payments processed through the payment platform owned by Safaricom.
Furthermore, Safaricom says its business partner failed to settle merchant accounts upon receiving withdrawal requests.
To this end, Kenya’s largest mobile operator reportedly incurred a KES 20.3 million loss.
Afterward, Safaricom, obviously, ended its business relationship with the Mombasa Road-headquartered data recovery company.
On the one hand, Safaricom says it lost a lot of money that EA Data Handlers should pay, hence the court case.
On the other hand, East Africa Data Handlers says Safaricom interfered with its operations by allowing its employees to get access to the firm’s backend system illegally. Safaricom employees reportedly made transactions without alerting the firm.
It is not clear which company lost the 20 million.