Tech Start-up Promoting Private M-PESA Payments Shut Down?

PrivPay anonymous payments

In today’s world, perhaps no piece of standard personal information has more value than your phone number. As we all know, phone numbers have become more than just a way to contact someone.

In recent years, more and more companies and services, including the government of Kenya have come to rely on phone numbers to confirm—or “authenticate”—users.

In practice, it means that a single, often publicly available, piece of information gets used both as your identity and a means to verify that identity. Basically, an entry to your entire online life.

As a result, phone numbers have often been misused by nefarious actors.

PrivPay a Solution for Private M-pesa

PrivPay Ltd.’s product is called PrivPay. It is an app and all it does is hide personal information from recipients whenever you send money or make a payment. Simply put, PrivPay comes in handy to those seeking private M-pesa.

According to Statista, Safaricom’s M-Pesa accounts for close to 99 percent of mobile money transfer subscriptions. Hence, PrivPay plays an important role in protecting the privacy and security of millions of Kenyans who use the mobile money service.

After its launch, PrivPay was available to Mpesa users. Unfortunately, Safaricom has in the recent past suspended PrivPay’s PayBill accounts. This has made the services unavailable to those seeking private M-Pesa.

Currently, it is not known why the leading telco took such a step. Admittedly, such an action will have detrimental consequences to the fledgling start up and to the privacy of its customers.

Why the PayBill Suspension is Intriguing?

Safaricom’s Promise to Support start-ups

Safaricom has consistently claimed it supports small businesses and start-ups. One way it does so is through open-source APIs. Additionally, Safaricom set up the Spark Venture Fund to mobilize capital needed to grow and scale commercially viable businesses that are contributing to societal change.

Hence, their suspension of PrivPay PayBill accounts contradicts their professed guidelines.

As it is, the move contradicts Safaricom’s stated motive of a more conducive environment for start-ups to thrive.

Privacy of Mpesa Users

Today we live in a world where digital product consumers are greatly concerned about their privacy. As more services get integrated into our lives, consumers have shown a desire for products that put their privacy first. Private M-pesa due to PrivPay is one such product.

Additionally, users have the right not to have information relating to their private affairs revealed or communication privacy infringed. Moreover, Kenya’s data privacy regulations define this right further by regulating use of personal data for commercial purposes.

By denying users PrivPay’s service, could Safaricom be infringing on their rights?

Is Safaricom Working on a Similar Product?

The world over bigger corporation thrive due to bigger funding to drive their research and development. In addition, a bigger budget enables them to quickly market the new product and scale.

Safaricom is no exemption to the norm. Unknown to us, their development team might have been working on a similar solution. It may be the case that PrivPay’s launch caught them flatfooted.

Safaricom is not exactly deaf to privacy concerns. Recently, an update now hides one’s Fuliza balance on the MySafaricom App after a transaction.

This is Not Entirely News

Obviously, the move to suspend what on speculation may be a rival product does not sit well. As an established tech player, such practices can be perceived as an “abuse of dominance.”

However, this is not entirely new. Safaricom has faced “abuse of dominance” allegations from its telco rivals. Airtel Kenya even went ahead to file a petition at the Senate ICT committee.

Additionally, Safaricom’s most profitable product, M-pesa is not without blemish. In 2008, Mr Christopher Ondieki took the telco to court alleging they had implemented an innovation he had presented to the company without having any agreement in place.

The innovator claimed he invented the technology allowing M-Pesa users to transfer money in US dollars and in Kenya shillings to and from bank accounts. The case was referred to the Industrial Property Tribunal for determination.

Furthermore, Safaricom had to fight in court before launching its Mpesa 1Tap service. The court found that in as much as there may be a possibility that Safaricom may have incorporated some of the inventor’s components in its product, there was a need for proof.

In another instance, Safaricom’s sister company Vodacom, was ordered by a court to pay the “Please Call Me’ inventor Sh1.4bn. The court viewed the initial deal Vodacom offered as “disingenuous”.

As an ICT “big brother”, Safaricom should use its might to nurture nascent sectors and spur growth, not the contrary.

Be it PrivPay, or any other start up, Kenyans, who tend to be early tech adopters, would not like to see the leading telco stifling innovation.