US State Department is Worried that M-Pesa is Enabling Cross Border Crime Like Money Laundering

The US government believes that leading global mobile money service like M-Pesa are encouraging cross border criminals to use the platforms without proper checks. The US Department of State report (pdf, pg.116) indicates that the mobile money services have impacted on the lives of citizens positively but allowing the cross border transfer without strict checks, is allowing the money launderers” to operate their trade within the region unhindered.

The report seems to specifically target the recent addition of cross border money transfer capabilities to the M-Pesa bouquet. Kenya is the biggest market in Kenya but Tanzania is catching up well though the growth has not been as impressive as in Kenya.

While M-Pesa is currently available in few countries in the region, it’s also easy to send M-Pesa from US through services like Wave which offers Bank to M-Pesa transfers through payment systems available globally.

According to the US State Department report,  remittances to Kenya totalled at least $1.55 billion in 2015 and $862 million between January and September 2016. There are 160,000 mobile money agents in the country with M-Pesa dominating the market. There are also 10million subscribers under the Mshwari mobile loan system.

M-Pesa allows a daily transfer limit of Ksh 140,000 ($1,400) and is currently present in 10 countries: Albania, the Democratic Republic of Congo, Egypt, Ghana, India, Kenya, Lesotho, Mozambique, Romania and Tanzania. According to Vodafone, as of the end of December 2016, M-Pesa served almost 29.5 million active customers through a network of more than 287,400 agents.  During 2016, the service processed around 6 billion transactions, peaking in December 2016 at 529 transactions every second.

In 2016, more than $33 billion was transacted through M-Pesa up from $28 billion in 2015.

While Safaricom is adamant to break it’s core (voice and data) business from the mobile money transfer system and grow it as an independent unit, the leading regional operator might soon find it hard to handle the likes of Facebook which are launching social media based money transfer systems. Internet is the future because M-Pesa is currently stagnant with no plans to rollout mobile or web based transfer systems to beat the national boundaries.


Written by Robert

Respected Kenyan blogger, tech evangelist, and social justice activist. Robert is known for his hard-hitting articles and opinions disseminated through his Twitter handle @RobertAlai or Facebook page (

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