Strategic responses adopted by Safaricom limited in Kenya to address fraud related challenges in the M-pesa service

Abstract

Prior studies have found that failure to actively combat fraudulent activity affects organization reputation negatively. At the time of study, only two studies were found that focused on strategic responses adopted by banks in Kenya to counter increasing fraud risks. There was no study that was found focusing on strategic responses adopted by mobile money transfer operators to combat fraud. This is despite the ever increasing cases of fraudulent activity reported by mobile money transfer users and thus calling for strategic responses to curb the spread of the crime. The study generally sought to determine the strategic responses adopted by Safaricom limited in Kenya to address fraud related challenges in the M-PESA service. This was a case study since the unit of analysis was one organization. Primary data was collected using an interview guide which contained open-ended questions. Content analysis was then used to present the data. The information was presented in a continuous prose. The study found that fraud is very sensitive and that customers have an immense fear of falling victim to fraud. The study established that Safaricom has encountered instances of customers using the M-PESA service being defrauded. The study then found that hoax text messages, extortion messages and customers conned to send money are the most prevalent fraud trends in the mobile money transfer service. M-PESA agents were also found to have fallen victim to fraudulent activity. The study found that the organization has dealt strategically with these cases by monitoring transactions for any suspicious activity on a regular basis and putting in place a fraud policy. The study recommends that the organization needs to work closely with law enforcement agencies and various arms of government to come up with policies and structures that deter future fraud incidences. The study further recommends that more research needs to be done on new technological advances and other strategic responses that could help in combating fraud more effectively.