GSMA certification, what this means for Kenya

It is the thirteenth day of October 2009.

Prof Njuguna Ndung’u, who was the then Central Bank of Kenya (CBK) boss, has been invited to launch the M-PESA International Money Transfer Service.

The service which had first been opposed by local banks due to fears of security had proven naysayers wrong.

But despite having been in the country for over two years and having enjoyed runaway success, the Professor still had to reassure the country that the CBK knew what it was doing.

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When he rose to speak, Prof Njuguna said the Central Bank had been evaluating and reviewing the mobile service since 2007 when Safaricom first requested to pilot an International mobile-based money transfer service in partnership with its U.K. partners, specifically the Western Union, Provident, and other partners.

He said the Central Bank evaluated it against the backdrop of its payments systems and forex market oversight objectives.

“In particular, the Central Bank’s concerns lay in safety, soundness, and efficiency aspects of the pilot to ensure it met not only our own criteria but also internationally accepted standards for international remittances,” he said.

Njuguna added that the CBK had studied the system’s reliability and governance, system audit trail, consumer protection, and the settlement risk, KYC requirements, service level agreements, dispute resolution procedures, remitting model, and business continuity plans among other evaluation criteria before giving the platform a clean bill of health.

First forward, Safaricom recently made another stride when it passed the GSMA Mobile Money Certification. This test is a global initiative that defines and promotes excellence in the provision of mobile money services.

But what does this certification really mean for Kenya?

For starters, it is a strong endorsement that Kenya has come of age to command respect in the strictly controlled international financial markets.

It also opens doors for many more international players to partner with local players to boost remittances from abroad.

It has also cleared the way for Kenya to export its local invention to the global market and the place to visit for anyone wishing to learn about mobile money.

To get the certification, M-PESA met the criteria in eight areas of assessment, including safeguarding of customer funds, service security, safeguarding of customer data and privacy, and mitigation against money laundering, terrorist financing, and fraud risks.

Mr. John Giusti the Chief Regulatory Officer of GSMA said that the GSMA Mobile Money Certification is a consumer-focused initiative, aimed at giving customers confidence that a provider has taken steps to ensure their funds are in safe hands, their rights are protected and they can expect a high level of customer service.

“With over 690 million accounts globally, the mobile money industry is having a clear impact on the global effort to expand financial inclusion, providing access to life-enhancing financial services and serving as a gateway to the digital economy,” Giusti said.

On his part, Safaricom’s Risk Management director Mr. Nicholas Mulila sees the award of the GSMA Mobile Money Certification to M-PESA as a strong testament to the heavy investment the firm has made in people resources and financial investments, which have been critical to building such a robust service.

“This certification further reassures our customers of M-PESA’s reputation as a trusted, stable and reliable solution,” Mr. Mulila said.

Other areas that were looked at during the assessment were the agent and staff management, reliable service provision, customer communication, customer service and management of customer complaints.

M-PESA is now one of the first mobile money services to achieve this level of certification, cementing its position as a global leader in mobile money transfer and payments.

Launched 11 years ago, the service began as a way for Kenyans to send money to informal savings groups, commonly known as “chamas,” before quickly evolving to fill the gap in person-to-person transactions within Kenya’s unbanked population.

It has since grown to 27 million customers and more than 148,000 agents all over Kenya, with Safaricom investing heavily in the service’s infrastructure to position it as the most preferred cashless mode of payment for goods and services in Kenya and beyond.

In 2014, Safaricom invested in a second generation M-PESA platform, which added more features and increased the capacity of the service to more than 900 transactions per second. The investment also saw the migration of the service from Germany to Kenya, a move that increased M-PESA’s availability to almost 100 percent.

This was followed in 2017 by another upgrade that resulted in the increased robustness of the service. The update enabled Safaricom to increase transparency around transaction costs and made it possible for customers to reverse transactions made to unintended recipients.

Since then, Safaricom has also introduced an enhanced and simplified M-PESA Application Programming Interface (API), which has allowed third-party partners to layer their services on M-PESA infrastructure, therefore stimulating business and attracting both local and global players.

Other measures that the firm has taken to boost security and reliability on the service include deployment of a highly qualified team of cybersecurity and fraud experts to provide first-line customer support.

Recently, the company digitized its subscriber registration process in order to eliminate the need for paperwork and form-filling. The new subscriber Registration App also ensures a water-tight process that empowers both agents and customers adhering to the legal requirements on subscriber registration.

Safaricom received the certification at the GSMA Mobile360 Event in Abidjan, Cote D’Ivoire. Other firms who received the certification include Vodacom Tanzania and Tigo Tanzania.

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