Safaricom discontinues M-PESA transactions to unregistered individuals

Safaricom, the premier telecom provider in Kenya, has announced a policy change preventing M-PESA users from sending money to unregistered individuals. This shift impacts not only the users of M-PESA, Safaricom’s mobile money service, but also those utilizing Airtel Money and T-Kash, which is run by Telkom, Kenya’s third-largest operator.

According to a statement via the carrier’s X account, “Transactions across different mobile money providers such as Airtel and T-Kash will no longer be facilitated for M-PESA users.”

Until now, M-PESA had permitted its customers to transfer money to unregistered Safaricom customers. Those without M-PESA registered accounts are deemed as unregistered.

While the rationale behind the change hasn’t been explicitly stated by M-PESA, it’s speculated to be a security measure as unregistered SIM cards can be used to move mobile money in an untraceable manner.

In recent years, governmental bodies have aimed to weaken M-PESA’s stronghold in Kenya. The nation recorded 38.1 million mobile money subscriptions as of September 2023, with Safaricom’s M-PESA primarily leading the charge. M-PESA’s market share in Q2 2023 was 96.5%, trailed by Airtel Money (3.4%) and T-Kash (0.1%).

Despite motions to tag M-PESA as a dominant player and the Central Bank of Kenya’s (CBK) push for mobile money interoperability, the adoption of Airtel Money and T-Kash has not burgeoned much, possibly due to their limited cash withdrawal and deposit center network.

Safaricom’s M-PESA service has been facing recent outages, prompting complaints across various social media platforms. The lack of transparency regarding this issue marks a shift from the customer-centric approach that endeared it to millions of Kenyan subscribers.