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Safaricom Sues East African Data Handlers Over Ksh20 Million Loss

Lipa Na M-pesa
Point of Sale with Lipa Na M-pesa payment platform. [PHOTO/ COURTESY]

Safaricom has sued East African Data Handlers over the loss of Ksh20 million clients’ money.

East African Data Handlers was hired by the telco to manage mobile money payment platforms, before the cash got lost in 2018.

According to reports by Business Daily, Safaricom had engaged the company in the business of data management and recovery in March, 2016.

Also, East African Data Handlers was to recruit merchants to the Buy Goods platform, and was mandated to receive various amounts from the merchants.

However, it is alleged that the company (East African Data Handlers) breached the agreement by failing to remit merchants’ money, who in turn complained to Safaricom.

Read: Samsung, Safaricom and M-Kopa Ink Deal To Sell Galaxy A10s For Ksh60 Daily Installments

In the suit, Safaricom accuses East African Data Handlers of failing to settle the merchants’ accounts directly after receiving a withdrawal request instruction, leading to loss of Ksh20.3 million. The telco has since suspended the contract.

In response, East African Data Handlers says “Safaricom wilfully and illegally allowed its employees back-end access into the aggregation system, who made irregular transactions without notifying them”.

“Despite being aware of the fraud committed by some of its staff, which fraud we pointed out as far back as 2017, the plaintiff took no substantive steps to prevent further backend access but instead chose to blame us for the loss of the merchants’ funds and terminate the contract,” East African Data Handlers CEO George Njoroge said.

The case will be mentioned on  February 19.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email

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