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The history of Mpesa from concept inception in 2005 to December 2008 to 2015 when virtual currency finservices, like Bitcoin Blockchain, emerged to take on Mpesa

It highlights how regulators respond to new technology

History never repeats itself, but it rhymes
August 2006

Safaricom approaches the Central Bank of Kenya
regarding M-Pesa
September 2006

The Central Bank of Kenya requests further information
from Safaricom regardning Mpesa
December 2006

Safaricom submits detailed risk mitigation program as per Central Bank request Consult Hyperion conducts detailed assessment of M-pesa systems
January 2007

Central Bank internal review of Safaricom
proposal. Legal opinion determines that M-Pesa
is not banking business.

The Banking Act did not provide the basis to regulate
products offered by non-banks like mobile network operators
February 2007

Safaricom is issued with a “Letter of No
Objection” by the Central Bank of Kenya for its Mpesa product
March 2007

Mpesa officially launches
June 2007

175,000 Mpesa customers, and 577 Mpesa agents;
Safaricom submits first returns to the Central Bank of Kenya
March 2008

Safaricom allows bulk payments to pay salaries with M-Pesa ‘Organizational’ accounts created so schools can accept fees with M-Pesa
May 2008

Safaricom reports 2.5 million active M-Pesa customers
September 2008

Safaricom reports 4 million Mpesa customers and 4,230 Mpesa agents
October 2008

Safaricom requests CBK to add a 'buy goods' feature with M-Pesa
November 2008

Safaricom reports 4.5 million active Mpesa customers, over Sh20 billion transferred through
the system since it was launch.
December 2008

Gerald Nyaoma, Director of Banking Services at the Central Bank of Kenya, returned to his office to discover a newspaper lying on his desk reporting that the Minister of Finance, John Michuki, had
requested the Central Bank of Kenya (CBK) to audit M-Pesa
December 2008

Unmasking the storm behind M-Pesa

"After months of procrastinating and burying its head in the sand, the Government has finally admitted that the popular Safaricom money transfer service, M-Pesa, could be a disaster waiting to happen."
December 2008

Michuki: Probe cash transfer

“I don’t know whether M-Pesa will end up well. I want
guidance from Central Bank over the concerns of M-Pesa
money transfer system."
December 2008

Michael Joseph, Safaricom Mpesa CEO

“Some of the banks are saying we are in competition, but I don’t think M-Pesa is a threat to banking industry.
“What we are doing is that we filling a gap that the banks
have left out,”
Nyaoma had been Director of Bank Supervision at the time that M-Pesa had launched, and therefore he had been at the heart of discussions within CBK over how
to respond to the new service
Before he could even consult his M-Pesa related files his phone rang. It was the Governor, wanting to know how he planned to respond in a way which would protect the reputation of the Central Bank
After the call, Nyaoma immediately called together his Head of Payment Systems to discuss how to respond to the gathering political and media storm.
January 2009

In response to the public request for audit,
the Central Bank of Kenya team decided to issue a public statement outlining their position on M-Pesa.
November 2009

M-Pesa had grown to over 8.5 million customers served by over 12,000 agents throughout Kenya. M-Pesa services have expanded to include bill payments, group salary payments, school fee payments
Fast forward to January 2015

Kenyan Banks are completely dependent on Mpesa

20 million Mpesa customers, 167,000 Mpesa agents
12 November 2015

Mpesa suspends services for Bitpesa without notice claiming Bitpesa failed to obtain authorization for bitcoin transfers from CBK. Bitcoins are not regulated in Kenya, but Safaricom insists that it produces a licence to that effect kenyainsights.com/revealed-how-a…
December 2015

Central Bank of Kenya (CBK) issues public notice cautioning the public on Virtual Currencies such as Bitcoin

"CBK reiterates that Bitcoin and similar products are not legal tender nor are they regulated in Kenya" centralbank.go.ke/images/docs/me…
Source:

Case study Enabling mobile money transfer The Central Bank of Kenya’s treatment of M-Pesa

gsma.com/mobilefordevel…
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