Airtel creates separate mobile money unit

Airtel Networks Kenya has separated its mobile money unit Airtel Money by transferring it to a new entity to be known as Airtel Money Kenya Limited.

“To better serve our customers, we have separated and transferred the Airtel Money Business from Airtel Networks Kenya Limited to Airtel Money Kenya Limited,” Airtel said in a statement on Thursday.

The new entity is now set to take over the provision of Airtel Money services in collaboration with the parent firm - Airtel Networks Kenya Limited.

The separation by Airtel aligns to the envisioned ring-fencing of payment service providers (PSPs) by the Central Bank of Kenya (CBK) which seeks to mitigate contagion risks posed by the linkages of payment providers to non-financial affiliates.

The actions sought by the CBK in its five-year National Payments Strategy (NPS) includes the creation of separate business units, separate records and accounts and the segregation of duties and internal controls.

Besides Airtel, Telkom Kenya has hinted at plans to run T-Kash as a separate unit.

Safaricom has nevertheless stuck at keeping voice, data and its mobile money service M-Pesa under one roof, arguing the pairing of Safaricom and M-Pesa has been complementary in driving growth for the telco.

In spite of analysts projecting greater revenues for M-Pesa, Safaricom has insisted that it does not see a substantial benefit from devolving M-Pesa from its voice and data business.

“M-Pesa is still run separately from product development to teams. We do not see any real benefit from a split other than from an organisation point of view,” Safaricom CEO Peter Ndegwa told Citizen Digital in an earlier interview.