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Equity Bank's mobile money transfer project hits a snag

25 September 2014, 11:47 Samuel Kisika

Nairobi - The National Assembly's Energy and ICT committee has said the Communication Authority of Kenya (CAK) will be held responsible for any risks incurred by subscribers of Equity Bank's thin SIM money transfer technology.

The committee chair who is also the Kigumo MP, Jamleck Kamau, said the committee was opposed to the Bank's new system of money transfer and had ordered the CAK not to issue the license to Equity until it proved that users' privacy in transactions will not be infringed.

"If CAK continues with the roll-out plans and the matter is under investigations by Parliament, the Authority will face full consequences if anything goes wrong against subscribers," said Kamau.

Read Also: CA approves Equity Bank to enter mobile money market

He said his committee is concerned about the security risks that the thin SIM technology has when overlaid on original SIM card, revealing that he has constituted an 11-member team to draw up terms of reference for hiring an independent international team of experts to verify the system.

"When the CAK appeared before this committee two weeks ago, the Director General, Francis Wangusi and the Board had not agreed. We have genuine concerns that when the thin SIM is put on the standard SIM, there is capability that users' PINs and SMSes will be revealed to third parties," said Kamau.

He reiterated that the hiring of an independent international team of experts is to be done in a week's time when the committee's selected members chaired by Rarieda MP, Nicholas Gumbo, outline the terms of reference.

Gumbo said CAK's approval of the system and issuance of an interim license to Equity Bank to roll out the project while under testing "is an indictment on the industry regulator."

Read Also: Equity Bank looks to telecoms to boost growth

"How do you (CAK) do experimental surgery on a living being? Those of you who are students of Medicine know that experimental surgery is done on cadavers," said Gumbo.

Igembe South MP, Mithika Linturi, said the Parliament has power to protect citizens in enjoying their fundamental right to privacy which is threatened by interests of some commercial firms.

"No single time has the House been stopped from looking into matters that touch on the wellbeing of the people," said Linturi.

"As the peoples' representatives who exercise sovereign power on their behalf, we have the power to oversight all institutions including CAK despite being among independent bodies," he added.

The CAK board approved the issuance of an interim license to Equity Bank to roll-out the thin SIM technology for one year as an independent consultant to be hired by the Authority audits its safety in terms of security of mobile money transfer, PINs and other data services.

The committee had directed CAK to stop the issuance of Mobile Virtual Network Operator (MVNO) license to Equity until all issues raised by other money transfer players, including Safaricom limited, are cleared by the House.

Safaricom, which runs M-Pesa money transfer and banking services is opposed to the Equity's technology arguing that embedding a SIM card on the primary SIM exposes subscribers to risks of fraud and loss of private information.

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