NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, September 22, 2014

Nairobi; Kenya: The dispute pitting Safaricom against Equity Bank over the latter’s plans to offer mobile money transfer services is unnecessary and should not be allowed to drag on. The controversy is a distraction at a time when both companies should be investing their time and money on improving their product and services.

At first glance, Safaricom seems to have a valid argument that Equity Bank’s technology is likely to threaten the security of its mobile money transactions. The global association of telecoms operators (GSMA) said it was not in a position to ascertain if individual overlay SIM cards implementation could gather any sensitive data and make it available to unauthorised persons.

The association also admitted it could not authoritatively offer a verdict on whether the new technology could manipulate or compromise the security of the existing SIM in anyway. It is noteworthy that although Safaricom has clung to its argument that Equity Bank’s new technology poses a danger to its M-Pesa customers, it has not carried out any tests on its own, preferably, using the SIM card its would-be-competitor plans to deploy.

Instead, it appears to also be relying on results of tests commissioned by its principal shareholder, Vodafone – a major beneficiary of profits earned from maintaining the status quo. Vodafone commissioned security firm Recurity Labs to assess the threat posed to its systems by use of thin SIMs. Using products offered by Bibitel as a sample, Recurity concluded that the technology poses “serious threats to the M-Pesa and mobile wallet systems.