Afrigather PrivPay, a Kenyan fintech that allowed prospects to make M-PESA transactions with out revealing their private particulars, shut down in Could 2023 after Safaricom lower its entry to M-PESA APIs. Safaricom’s motion was linked to a fear that the fintech’s providing violated a number of compliance points, two individuals with direct data of the matter mentioned.
Names and cellphone numbers shared with retailers in transactions are sometimes used for advertising and marketing, and PrivPay, which launched in 2022, bought the notion of privateness to customers. Its resolution was powered by Daraja—M-PESA’s free fee APIs.
The startup claimed it held talks with Safaricom about its enterprise mannequin and bought the corporate’s buy-in earlier than launch. It additionally mentioned the telco backtracked after PrivPay started attracting media consideration.
“Your corporation mannequin just isn’t permitted by Safaricom,” Safaricom wrote to PrivPay in Could 2023 in a letter seen by TechCabal. M-PESA prohibits third-party transactions.
Safaricom didn’t reply to a request for feedback.
In Could 2023, Safaricom suspended the fintech’s pay invoice account—a money assortment quantity constructed on M-PESA that allowed the startup to course of transactions. The telco mentioned PrivPay—which claimed to have 30,000 customers—contravened Kenya’s Anti-Cash Laundering Safaricom and requested that it get hold of a fee service supplier (PSP) licence from the Central Financial institution of Kenya (CBK). Acquiring the fee licence takes as much as six months.
“PrivPay retains a report of each transaction and ensures that the style wherein the information are collected and saved for at the very least seven years can select any suspicious patterns,” PrivPay mentioned in a response to Safaricom seen by TechCabal.
For Safaricom, within the absence of a licence, solely a letter of no objection from the Central Financial institution of Kenya would suffice.
“We didn’t discover a PSP licence on the time as a result of assets required. Additionally, it was going to take time,” a former PrivPay govt advised TechCabal.
Whereas PrivPay hopes to stage a comeback, it should keep in mind that good intentions alone is not going to assist it meet regulatory necessities.
