Lipa na M-Pesa refunds are not customer friendly

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Safaricom launched Lipa na M-Pesa in 2013 to enable merchants to be able to accept payments via their popular mobile payments platform, M-Pesa. The launch brought together merchants payments via PayBill and Buy Goods under one platform.

The service has been helpful to both customers and merchants, giving them an accessible payments platform for both goods and services. Nowadays, you can be able to pay using the service for almost everything from household goods, hair cut and electronics at different outlets.

With the service, comes the inevitable need to refund customers in cases where they pay for a service that isn’t delivered or when they pay to the wrong Lipa na M-Pesa number.

This happened to me on January 5th 2019 when I mistakenly sent money to the wrong Lipa na M-Pesa number. I was at Blackyz bar and wanted to pay my bill. I however inputted the wrong number and the money went to Titanium Entertainment instead of Blakyz. I immediately called Safaricom and they said they would work on it and hopefully refund the money in 72 hours. This never happened.

The Safaricom process for refunds is as follows;

  • Customer lodges the issue
  • Safaricom contacts the merchant and asks them to confirm the payment was made
  • If the merchant agrees that the payment was erroneous or service was not provided, a refund is made.

In my case, the merchant said that no payment was made and in the Safaricom process highlighted above then that’s that and a refund is unlikely. Kindly note that the Safaricom customer care could see the payment I made to them but that doesn’t matter in the current process. I however followed up and the Safaricom customer team sent me an SMS with the contacts of the merchant. I called him several times and even sent him the M-Pesa confirmation message. He however insisted that he did not receive my payment. I asked him to contact Safaricom for confirmation but he declined. It is at this point that I gave up.

Fast forward to 4th June 2019 and I had a similar issue. I was paying for a purchase at LC Waikiki via CBA Loop and the app hang and I inadvertently paid twice. The store immediately acknowledged this but said they were not able to refund. The manager informed that the request would have to come from Safaricom and then the refund would be made. I called CBA and they said they would contact Safaricom who would process the refund. The refund has not been made to date.

The current Lipa na M-Pesa refund policy is not friendly to customers and puts the burden on them to prove the transactions took place. It also takes unnecessary long even when the merchant agrees the transaction took place. In my opinion, Safaricom should adopt the chargeback model that card companies use when there is a transaction in dispute. I mean that, they should freeze the payment until the issue is resolved. They should also allow merchants to be able to refund the amount directly in a situation where they are in agreement that the erroneous transaction took place.

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