Kenya: Mobile Money Providers Sue Safaricom for Service Stoppage

Safaricom has been sued by two mobile money service providers for suspending their services through alleged intimidation.

Lipisha Consortium Limited and Bitpesa Limited Friday went to court over termination of their services on November 12.

The pair offers a platform for businesses that enables them to collect, process and integrate payments from customers and clients using mobile money.

The firms blamed Safaricom for compelling Lipisha, through intimidation, to cease offering the services nearly a week ago with Bitpesa or face the risk of terminating their business.

According to Lipisha, Bitpesa is one of their largest customers hence the suspension results to the stoppage of services to Safaricom.

Lipisha claimed that a large amount of its money is being withheld in Safaricom's account, a situation which exposes it to a risk of being sued by other customers for multiple claims.

Mr Kiragu Kimani for the firms said Bitpesa is at the risk of collapsing there being no readily available platform to conduct its business, in view of Safaricom's conduct and that unless it is restrained from terminating the services it has been offering, thousands of Lipisha customers will be inconvenienced.

"The suspension of the Lipisha services and the demand that Lipisha stops transacting with Bitpesa is unlawful and infringes on the firms' rights to acquire and own property, fair administration as well as their economic interests," Mr Kimani said.

However High Court Judge Joseph Onguto only certified the matter as urgent.

"I would want to hear why the suspension was done without a notice because I think there must be a reason stating termination of a contract but I will certify this as urgent, we can deal with it next Tuesday," Justice Onguto said.

The firms claimed that Safaricom is aware that services offered by Lipisha are for the benefit of third parties.

Lipisha was yet to sign Safaricom's terms and conditions, which would enable their customers to connect with M-Pesa in order to allow the automated payments.

It alleged that Safaricom suspended its services through a text message while demanding that the firm produces its licence from Central Bank on the assumption it trades in Bitcoin.

The case will be heard on November 24.