Court directs CA to determine Safaricom’s Lipa na M-Pesa case

The High Court sitting in Nairobi has directed the Communication Authority of Kenya (CA) to determine the legality of the transfer of Safaricom’s Lipa na Mpesa Pay Bill transaction charges on government services to the public.

Justice Lawrence Mugambi said it is not beyond the reach of the CA to determine and provide sufficient remedies if necessary.

Mr Moses Wafula had filed a petition challenging the constitutionality and legality of the charges that Safaricom levies on users of the pay bill option while making payments for various goods and services.

The cost for the service is passed to the end consumer of the M-Pesa Pay bill service.

In his judgment dated January 22, 2025, Justice Mugambi dismissed the petition against Safaricom, the Attorney General, the Central Bank of Kenya, the Cabinet Secretary Treasury and CAK.

He said the doctrine of exhaustion barred Mr Wafula’s petition for failure to engage CA in solving the dispute.

“In my view, the nature and scope of the dispute perfectly falls within the competence of the CA. There is an appellate machinery whereby if dissatisfied, the petitioner can lodge an appeal to the Appeals Tribunal established under the Kenya Information and Communications Act,” said Justice Mugambi.

In his petition, Mr Wafula wanted the court to declare unlawful the decision made by Safaricom, the State and other parties to transfer the Lipa na M-Pesa pay bill transaction costs to the public.

He said the decision violates Article 46 of the Constitution of Kenya.

Wafula said it is unfair to give its primary clients the discretion to decide since they will opt to minimise their costs by passing the resultant costs for the services of the end user (consumer or public).

“That the unfairness is palpable when Safaricom offers services to a different person and then asks the person or entity’s permission to charge their customers for the same services,” said Wafula in his affidavit.

He noted that allowing Safaricom to charge the end consumers for the Lipa na Mpesa product amounts to a double charge against the public who are already being charged for the services rendered by the businesses or government and the services of the agent, Safaricom Ltd.

He stated that the buy goods application is cost-free but Safaricom has limited the pay bill option as the only way to pay for essential services such as those at the Attorney General’s Office, Huduma centres, court filing fees, electricity bills and the National Transport and Safety Authority (NTSA) service.

Wafula noted that the buy goods option should be used in these services at no extra charge to the consumers.

 Additionally, he argued that Safaricom should be restrained from allowing their primary client the discretion to determine who should bear the costs of the transactions.

Wafula argued that any vendor who contracts between Safaricom, AG and other parties giving leeway to impose the transaction charged for the service upon the public users is unfair, unlawful, unconstitutional and therefore null and void.

He said companies offering digital mobile loans to citizens like Zenka Digital Ltd trading as Zenka, and MyWagepay Ltd trading as FairKash insist on the M-Pesa pay bill option as the only mode of repayment of mobile loans without providing any other alternative payment options.

He noted that is not ethically right for Safaricom to collect billions of shillings for some corporations at zero value and assign the costs of such services.

“Safaricom has not only zero-valued the services rendered to the State and its agencies but also created a loophole in the law to protect the said contract as a tender for the provision of mobile money services (Tender Number TNT/029/2017-2018) at the cost of Sh15,” argued Wafula.

He said Kenyans are losing a lot of money to Safaricom using the government as well as big companies who do not display other payment options such as the buy goods number.

He blamed the Central Bank of Kenya (CBK), Treasury Cabinet Secretary and CA for abrogating their regulatory duties leading to the violation of the rights of the customers.

He said the three options presented by Safaricom about the payment of the fees are, allowing the primary clients to state if they will pay requisite fees, bear the fees, or the costs should be shared between the businesses, government departments, institutions and their customers.

However, he noted that all the primary clients have elected that Safaricom recoup its charges from the public. He sought for orders stopping Safaricom and its agents from imposing charges on him and the public using the Lipa na M-Pesa pay bill payment option.

He also sought to have the court compel Safaricom to review all their contracts with other businesses and delete the clause that allows them to charge the public in all their contractual engagements with the State, corporations or other business entities and institutions.