HUDUMA NAMBA TO BECOME MANDATORY FOR MPESA TRANSACTIONS

Kenyans will soon be required to use Huduma Namba to conduct digital transactions, including M-Pesa.

The Nation. Source: UGC The Central Bank of Kenya (CBK) announced the plan in a new report to reduce fraud.

In the National Payments Strategy (NPS) report for 2022-2025, CBK said the National Integrated Identity Management System (NIIMS) or simply Huduma Namba, will boost the safety and efficiency of online transactions.

The expected rollout of the National Integrated Identity Management System (NIIMS), commonly known as Huduma Namba, will provide a key impetus to further deepen the adoption, safety and robustness of digital payments,” CBK said in the report.

Increased transactions CBK noted that with increased usage of digital payments, security risks might increase, requiring new measures to improve safety and reliability.

“As more payments shift to online and electronic channels, risks will increase as well. The increased use of online and digital channels also meant increased cases of fraud and scams at a customer level,” CBK said in the report.

The bank also noted that the impact of COVID-19 has led to increased dependence on electronic infrastructures, most of which are owned and operated by private entities, which has created concerns on a wide range of issues from data privacy to market concentration risks.

“There will be a need for increased vigilance and alertness in a post-COVID payments world, to protect systems against increasing cases of cyber-attacks and AML/ CFT risks.”

The government will implement the rule when the value of mobile money transactions carried out at agents, as a proportion of GDP, has increased from 23% in 2010 to 60% in 2021. In terms of absolute performance, in 2021, CBK said there were over 2.2 billion transactions with a total value of over KSh 6.9 trillion.

“This trend is expected to continue increasing once initiatives such as interoperability are fully rolled out, allowing customers to transact across the ecosystem irrespective of their provider seamlessly.”

Catching tax cheats
The move comes when the government has announced plans to replace the Kenya Revenue Authority (KRA) PIN with Huduma Namba to target tax cheats. The proposal in the Huduma Namba Bill, 2021, sought to amend the Tax Procedure Act to make biometric ID the key number for identifying taxpayers.

Huduma Namba is useless
CBK’s new intentions are despite a landmark ruling made in October 2021 that declared the Huduma Namba ‘useless’. The Hugh Court said the law was not duly followed during its rollout with Justice Jairus Ngaah saying the government failed to conduct a data protection impact assessment before launching the project.

Huduma Namba registration started in 2019 and was set to replace the currently-used national identity cards, a process that has so far cost the Kenyan taxpayer KSh 10.6 billion.

Sourced from tuko