Mobile Money – MPESA Continues to Gain Ground, but Scams Damage Trust

Mobile money transactions in Kenya has hit 68% of GDP as remittances continue to drive growth, according to data company Global Voice Group (GVC). It is estimated that Kenyans make an average of Sh21.7bn worth of mobile money transactions, highlighting the pivotal role mobile money plays in the economy. Data from the Kenya National Bureau of Statistics for the year 2022 shows that the overall value of mobile money transactions reached an astounding Sh7.91tn, which was a 15% increase compared to the figures reported in 2021. A paper titled “Data-Driven Transparency and Compliance in the Digital Financial Ecosystem in Africa”, by GVC shows that mobile money and remittances will continue to dominate Africa’s economic development if supported with tools to boost data-driven transparency and compliance.

However, mobile money scams are increasing. For example, Malawians lose around $117,000 a month to professional scammers who have built a formidable network to exploit vulnerabilities in the mobile money system, according to the Malawi Communication Regulatory Authority (Macra). The Reserve Bank of Malawi estimates that about 10.9m people owned mobile money wallets in Malawi at the end the first quarter of 2023, compared with 1.2m bank accounts. As mobile wallets become more popular and widespread, criminals have seen them as an opportunity to exploit users who may not be fully aware of the risks or security measures. The fraudsters use SIM swapping, a process of manipulating mobile carriers into transferring a victim’s phone number to a new SIM card under their control which gives access to the victim’s mobile money and other accounts. Malawi’s largest phone operator, acknowledged that some of the challenges with mobile money fraudsters had become increasingly sophisticated evolving from street level fraud to “well-organized parallel call centres duping customers nationwide.”

And talking about mobile money, did you know that in-vehicle payment systems are becoming increasingly popular? In the US, Hyundai offers a payment system to help drivers locate, reserve and pay for parking with greater ease than ever before. I suppose it also pays for fuel too, but I wouldn’t like to think my car suddenly decided to fill itself up with petrol prices they are today!