Competition Authority Orders Safaricom to Be Transparent On 'Lipa Na MPesa' Service Billing

The Competition Authority of Kenya (CAK) has today ordered mobile operator Safaricom to be transparent and disclose to its MPesa users how the 'Lipa Na MPesa' charges at merchant shops and petrol stations is calculated.

In a press release sent out today, Mr Wang'ombe Kariuki, Director-General, CAK states that the order follows a complainant the organization received on January 23 this year regarding the non-disclosure of the billing system by Safaricom of the charges payable by consumers for use of its Lipa Na Mpesa service in petrol stations and merchant shops and outlets across the country.

Based on its consumer protection mandate and after undertaking investigations, CAK has now ordered Safaricom to undertake a campaign in both electronic, during prime time, and print media for at least 14 days to sensitize consumers that settling bills through the Lipa Na Mpesa service at petrol stations currently may attract a fee of 0.5 per cent of the transaction value and that applicable charges on Lipa Na Mpesa service, if any, can be accessed through the *234# USSD code.

"Further, Safaricom Limited is required to disseminate Point of Sale (POS) stickers to all merchant outlets/points and Fuel Tent Cards highlighting clearly the 0.5 per cent or any other applicable charge on the transaction value, to all petrol stations employing the Lipa na Mpesa service throughout the country," adds the CAK boss in the statement.

Safaricom is required to have disseminated the Fuel Tent Cards to the outlets by August 31, 2015 while the Point of Sale (POS) terminals have to be delivered at the respective merchant outlets by September 30, 2015.

In future, Safaricom has also be ordered to educate consumers by changing Point of Sale (POS) materials to reflect any new charges that will be introduced by Lipa na Mpesa merchants who are currently not charging for the service.

The Lipa Na MPesa was added to Safaricom's MPesa menu in mid 2013. It gives MPesa subscribers the option of paying for goods and services using cash stored on their MPesa accounts. To use the, subscribers go the 'M-PESA Menu', select 'Lipa Na M-PESA' and select 'Buy Goods and Services', then enter the 'Till Number' which is normally displayed at the various merchant outlets accepting payment via this method. One then follows subsequent prompts to complete the transactions after which both parties - merchant and MPesa customer - then get confirmation messages from M-PESA.

Previously, using the service attracted no additional charges but these were later on passed on to consumers by the merchants.

To charge for 'Lipa Na MPesa' service charges, Dial *234#, select 'Tariff Query', select the 'Lipa na MPesa" option, enter the merchant's 'Till Number' followed by the amount. You will then receive a notification of how much it will cost you to make the payment of the specified amount. For example, purchasing fuel worth Kshs 300 using the services attracts a fee of Kshs 1.50 while Kshs 1,000 fuel will cost you an additional Kshs 5 when you pay using the platform.

SOURCE:CIO EAST AFRICA