There have been talks to professionalize the jua kali sector in the country. Such talks center on aiding the jua kali artisans attain required skills to produce competitive products that can compete against cheap imports, hosting the artisans in some place according to specialization (e.g. have all carpenters in an area operate under one shed), allow artisans access cheap credit, and basically recognize their contribution in nation building. But one important way to easily professionalize the informal sector is to formalize their financial management and the first step would be to encourage them to accept payments through avenues such as Lipa na M-PESA, an avenue that has had its doors closed to them.

Do you remember that Lipa na M-PESA ad where a guy hawking mitumba ran for the tree after he was overwhelmed by demands for change? I criticized it in the article Lipa na M-PESA ad is misleading then it got discontinued. The reason I was up against the ad is because it gave out false information that even hawkers and mama mbogas of this great nation can have a Lipa na M-PESA account for accepting payments...yet the reality on the ground is that only officially registered businesses and companies can have such an account. The ad got pulled off the screens and replaced with ads depicting restaurants and other official businesses operating a Lipa na M-PESA Account.

But what if the hawkers, jua kali artisans, estate based shop/kiosk operators, and mama mbogas of this great nation could have a way to operate a Lipa na M-PESA account? After all, it is the informal sector where these great Kenyans operate in that control more than 34% of the economy and amazingly hosts the over 77% of employed Kenyans. For a country that aspires to go cashless, this sector must be incorporated into the cashless systems without requiring the business operators to register their businesses as currently is the case with Lipa na M-PESA.

It is important for Safaricom to allow mama mbogas and the information sector in general to operate Lipa na M-PESA Accounts, as this will not only accelerate the journey towards becoming a cashless society, but as mentioned above, will also allow these informal business men and women professionally manage their accounts. Safaricom has two options to do this: either allow every business man or woman operate a Lipa na M-PESA account, or allow a third party to manage their Lipa na M-PESA accounts as explained below.

The main reason Safaricom does not allow a mama mboga to operate own Lipa na M-PESA account is because of Know Your Customer Policy (KYC). I however do believe that any informal business woman intending to open up a Lipa na M-PESA account is already known by Safaricom as such a person has an M-PESA registered line. Although the customer in this case is the business, what I know under laws governing businesses is that sole proprietorship is not distinguishable from the business owner - thus unless the business in question is being presented as a company, Safaricom ought not to demand for a business certificate in order to issue a Lipa na M-PESA account. But if this is not reason enough for Safaricom to open up Lipa na M-PESA to every jua kali artisan in the country, then I suggest they allow a third party willing to take the risk to manage a Lipa na M-PESA account on behalf of the informal businesses.

If Safaricom would allow a third party to provide Lipa na M-PESA services to jua kali artisans, then I think a player like PesaPal would be able to provide such a service professionally given their experience in doing so with M-PESA Pay Bill service. About two weeks ago I explored the reasons why one should have a PesaPal Account in the article Is it necessary to have a PesaPal account? When reading through the PesaPal services, I realized one thing: that PesaPal has allowed virtually all learning institutions right from local primary schools in remote places to renowned colleges and Universities be able to receive school fees via M-PESA, even if the remotely located primary school does not have a Lipa Karo na M-PESA bill number. What this means is that PesaPal can easily expand and offer Lipa na M-PESA services to mama mbogas too.

This is how such a service would work: PesaPal would register a Lipa na M-PESA Account with Safaricom, and open up that Till Number to the public via their PesaPal online portal. Any businessman or woman who would want to accept payments via Lipa na M-PESA would open up a PesaPal account either online or via a USSD enabled registration platform, ask customers to pay via the provided Till Number, but later receive their monies from PesaPal on their respective M-PESA numbers by redeeming them from the created PesaPal account.

But there is a problem right there, how would PesaPal know that the received amount belongs to Mama Akinyi the Nakuru based grocery owner and not Kamau, the Kiambu based boda boda operator? This is the obstacle that Safaricom needs to address. If the payment was to an M-PESA Pay Bill number, then knowing the account the payment is intended for is very simple - each Pay Bill number also has an account name to which the payment is payable. For example paying electricity bill to Kenya Power's 888888 Bill Number allows you to use your electricity bill number as the account number. A similar solution should exist for Till Numbers under Lipa na M-PESA.

I am not suggesting that different accounts should be enabled under one Lipa na M-PESA Till Number just because I want mama mboga to create an account with people like PesaPal, but even for people who have various lines of businesses under the same business name should be able to use one Till Number for all their business units but still be able to manage individual business units' accounts separately. For example you own a petrol station that also operates a restaurant and a shop (mini supermarket), and you would really like to separate those accounts as you have always done. You also do not want to register three separate Lipa na M-PESA accounts. So allowing sub-accounts under one Till Number will allow you to create several sub-accounts for the same Till Number and manage the separate accounts for each business units efficiently instead of accepting Lipa na M-PESA for only one business unit but continuing to receive cash for the other business units that you didn't want to open Lipa na M-PESA Accounts for.

Will Safaricom allow mama mbogas to operate Lipa na M-PESA accounts either directly or by allowing a third party to do that the same? Maybe not...but if not so then it means Safaricom has lost touch with what has actually driven M-PESA to current heights - enabling the shunned (by the banks) Kenyans to own an account platform through which they can easily receive and send money and also pay for goods and services.

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In other news, a reader wanted to know whether it is possible to reverse payments made through Lipa na M-PESA. His question is based on the fact that many businesses refuse to be paid through M-PESA since once a customer has sent the money to the merchant's phone number, then the customer can walk out of the premise with the goods bought, call Safaricom customer care, and state that he just made a transference to the wrong person, and have the money back. If reversing payments made via Lipa na M-PESA is possible, then he doesn't understand why businesses should accept Lipa na M-PESA.

If reversing payments is impossible, then how is a wrong payment corrected? For instance you have taken your Kshs 850 worth of lunch in a restaurant that accepts Lipa na M-PESA. You go to the Lipa na M-PESA options, enter the Till Number then instead of inputting 850 as the amount, you wrongly input it as 8500, quickly confirms then sends. Will you have just lost Shs 7,650?

The answer is that it is possible to reverse a wrong payment but not in the same process that reversing a wrong transference is effected. To reverse a wrong payment, Safaricom will have to confirm with the merchant whether indeed the payment has been made in excess and process the reversal within 24 hours. Of course the merchant will have to confirm that the payment was excess as you will be present when the call is being made.

Then the related question is, what if you entered a wrong Till Number? Well you will have to call Safaricom, they will call the merchant, and if the merchant confirms that indeed she received payment she has not offered services for, Safaricom will reverse that payment. Problem will come in when the merchant acknowledges that she offered services for the received amount - in that case, it becomes a police case. Woe unto you if the Till Number owner is a business operator based somewhere in a remote locality in Mandera county.