Kenya Power bars banks from selling tokens

Following a decision that will only authorize telcos to partake in the lucrative transaction, Kenya Power has dashed the aspirations of commercial banks and other third parties to renegotiate new contracts to sell prepaid electricity tokens.

Regarding the expiration of the prior contracts on August 31, Kenya Power’s acting managing director, Geoffrey Muli, stated on Thursday that no new contracts will be negotiated.

“We have no immediate plans to bring the third parties back, maybe under a different arrangement. If the need arises then we can think about it but for now, no,” Mr Muli said.

The company’s viewpoint goes against the guarantees commercial banks made to their clients that the decision was only temporary.

According to Mr. Muli, more than 95% of its customers use pre-paid plans and the 888880 Paybill, therefore there is no need to bring the third parties back.

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Given that banks and other third parties received commissions for the purchases made under the prior contracts, the state-owned power company is depending on the use of its internal payment channels by prepaid consumers to prevent fraud and safeguard revenues.

“We need to ring-fence our systems and make sure that they are not open to many people because under that arrangement you will not be imagining too much that having third parties exposes our revenue due to fraud,” Mr Muli said.

Among the third parties that prepaid customers used to purchase tokens include Dynamo Digital and Vendit.

In comparison to the same period a year prior, Kenya Power reported a net income of Sh3.8 billion for the six months ending in December.

Its profitability have also borne the brunt of the January 2015 fall in power rates of 15%, which has forced the company to implement premium tactics in order to collect additional funds for debt repayment and system upgrades.

Since Thursday, banks have been texting their clients to let them know that they are in negotiations with Kenya Power and that the decision is just temporary.

“Dear customer, the Kenya Power prepaid token purchase and postpaid bill payments services will be temporarily unavailable on our mobile banking channel effective Thursday, September 1, 2022,” NCBA Group texted to their clients.

Numerous third parties, such as corner stores and computer cafes, have been purchasing electricity tokens for customers while also making commissions.

Additionally, there have been instances where prepaid clients who purchase tokens through third parties did not receive the token, causing a public uproar.