A lawsuit has been filed at the high court challenging the legality of MPESA operations.
The suit particularly dwells on the amorphous structure of the Mobile Money service from Safaricom.
First, the MPESA service was launched knowing too well that it had not fulfilled all the required Kenyan law to operate in its territory.
Secondly, at launch, the money by clients was to be held in trust for clients as beneficiaries. This is because Safaricom was not registered as a Deposit Taking institution.
Thirdly, Safaricom ‘as the legal owner of the real money was supposed to establish or appoint a legal entity in the form of a genuine Trust company to hold MPESA accountholders’ real money.
Fourthly, the Central Bank of Kenya was supposed to provide sufficient regulatory oversight to ensure that MPESA accountholders’ funds are safeguarded at all times.
Abuses by Safaricom
We have seen cases where Safaricom pays FUliza loans for people who have been sent money wrongly and tell the offended person that there’s nothing they can do.
We have seen cases of SIM Swaps where criminals wipe the MPESA balance of a victim, take all known loans through the mobile phone and ‘collude’ with Safaricom and Security agencies to protect the criminals.
Despite holding trillions of client money, Safaricom is not a registered commercial bank.
Safaricom has also incorporated the rich and the bank and has become the only bank of sorts for all Kenyans.
The danger of Safaricom being central to Kenya’s money economy was raised in parliament. Parliament has also been struggling to get Safaricom and MPESA split.
Both to no avail because of the power the be, powers that sit in London and South Africa.
A 2016 Budget Policy Statement (BPS) report by the National Treasury sounded the warning.
The authors of the report predict that an M-Pesa outage would cause loss of revenue — direct excise tax and corporate tax by firms running the systems — and reduce confidence in the services.
“If this system was to be compromised, the impact would be substantial considering the linkages and the corporate tax revenue for government,” concludes the BPS.
“Technological innovation via the mobile money transfer services and its pivotal role in the economy should therefore be given due consideration as a plausible fiscal risk.”
Multiplier effect
A compromise of the system would have a multiplier effect on them and the State due to their diminished spending power, which would affect tax collection.
Trillions of shillings is transacted through mobile money, making it a crucial source of excise tax revenue for the government. A 10 per cent excise duty is charged on mobile money transfer services.
A system collapse would also affect the revenues of the firms who own the systems and the amount remitted as corporate tax.
A thriving mobile commerce is also mostly transacted using mobile money, meaning its compromise would affect thousands of businesses.
Document
Snippets from the document

There were deliberate moves to push for MPESA operation despite the glaring illegalities.

The Plaintiff goes on to show how the Ministry of Finance, subsequently covered the illegalities to make MPESA work.
I hope you saw the problems with MPESA highlighted above and by now know that if it had worked as a bank for the ‘unbanked’ as intended, and also have a trust where accountholder’s monies were deposited. We wouldn’t have the issues we have now.
If you are not following, I ask you to go back up and re-read of find a lawyer to help you.
Read how the appointment of the current National Treasury Cabinet Secretary Njuguna Ndung’u, as Central Bank Governor in 2007 made it possible for MPESA to launch without fulfilling all the legally required checks.
Here, am beginnig to wonder if Vodafone, paid bribes. Take a guess.

the transfer of funds was effected in a milieu of illegality and unlawfulness, through the investment of M-Pesa Accountholders’ funds at the expense of the
Accountholders by Safaricom, M-Pesa Holding, the Vodafone Group and other associated Defendants in this suit.
Safaricom is also accused of money laundering.
This document is big, read for yourself by downloading it here (<—click here)