Equity digs in on tariff row with Safaricom
What you need to know:
- In a protest, Equity Bank wrote to the Central Bank of Kenya, demanding an intervention by the regulator on the rates that it called “unjustifiable and unconstitutional”.
- In its latest letter, Equity wants Safaricom to carry out a media campaign informing the public about the intended changes.
Equity Bank is digging in on its tariff war with Safaricom over changes to M-Pesa charges for transfers made from bank accounts to the mobile platform.
The two companies have been exchanging letters since Safaricom sent out a notice to banks on its intended review of M-Pesa charges, with Equity protesting the fees review.
In its latest letter, Equity wants Safaricom to carry out a media campaign informing the public about the intended changes.
“We seek your confirmation that you shall within the shortest possible time… take out necessary steps to inform the consumers of your decision to vary the tariff guide either through a public notice in local dallies of nationwide circulation or an equally effective mode of communication,” a letter signed by Equity Group CEO James Mwangi said.
The changes have sparked an uproar among consumers, who took to social media, saying there was a silent fight between Safaricom and Equity.
Consumers and observers argued that Safaricom had increased charges to defend its M-Pesa platform at a time when Equitel had just entered the market and was trying to gain ground.
In a protest, Equity Bank wrote to the Central Bank of Kenya, demanding an intervention by the regulator on the rates that it called “unjustifiable and unconstitutional”.
“Whereas we do not contest the right by Safaricom to vary the prevailing tariffs, we are disturbed by the timing and reasons ascribed to the variation and believe the outcome of the variation is in violation of the law,” said Mr Mwangi in the letter dated August 28 and addressed to the Central Bank.
While responding to Equity’s demands, the telco said: “We are cognizant of the fact that we had implemented the new tariff for banks utilising the additional feature and shall revert back to the previous tariffs effective August 25.”
Safaricom added that it had notified the CBK of the new rates that came about after banks, including Equity, introduced a new menu riding on the M-Pesa platform without informing Safaricom.
INCIDENTS OF FRAUD
The telco attributed the changes to increased cases of fraud and complaints related to erroneous transfers from bank accounts to other M-Pesa accounts apart from the holders.
Equity denied knowledge of any incidents of fraud, instead arguing that the telco’s move was an attempt to stifle its mobile money platform, Equitel, which was launched in partnership with Safaricom’s rival Airtel Kenya.
“The move is another barrier placed on our road to giving Kenyans freedom, choice and control,” Mr Mwangi said.
Safaricom also explained that the higher rates would be applicable by December 1 only to banks that had introduced the new menu, which steered clear of M-Pesa charges.