Strategies Used By Mpesa Agents and Their Effectiveness in Deterrence of Counterfeit Bank Notes Fraud: Case of Nairobi County
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Date
2019
Authors
Kimani, John Muinde
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
M-pesa is a mobile money transfer and agent banking system that has become popular
over the years due to its easy and cheap access to financial services, especially to the
middle and lower classes of the society. However, this type of service has lately been
threatened by many cases of counterfeits in bank notes and fraudulent transactions which
ultimately challenges the effectiveness of the strategies used to deter counterfeits. Using
the Theory of Planned Behavior, this study, sought to evaluate the effectiveness of the
strategies that were used by M-pesa agents in the deterrence of counterfeit banknotes. The
main purpose of the study was to evaluate the strategies used by Mpesa agents and their
effectiveness in the deterrence of counterfeit banknotes fraud. Specific objectives of the
study were; to establish the fraud related challenges faced by M-Pesa agents to counter
fake bank notes in Nairobi City County; to determine the strategic responses on fraud
adopted by the M-Pesa agents as the deterrent to counterfeit bank notes fraud in Nairobi
City County; to evaluate the effectiveness of the strategies employed by M-Pesa agents in
the deterrence of counterfeit banknotes fraud in Nairobi City County and to determine
strategic interventions M-Pesa agents can adopt in the deterrence of counterfeit
banknotes. The study employed descriptive survey design to study the various aspects of
fraudulent activities on counterfeit banknotes during mobile money transactions and how
M-pesa agents responded to the threat. The targeted population was M-pesa agents,
police officers, Safaricom, and the Banking Anti-fraud unit in Nairobi City County.
Using both Purposive and Simple Random sampling techniques the sample size of 109
was drawn. To collect data for the study, both qualitative and quantitative methods were
used. The study used two tools for data collection; i.e. interviews (KIIs) and
Questionnaires. Descriptive Analysis was used to analyze the data. The results were
triangulated to ascertain if the results from the two methods used lead to the same
outcome. The study revealed that there were fraud-related challenges deterring M-pesa
agents in countering fake bank notes in their operation, the prevalence of this challenges
in the deterrence of counterfeit notes was found to be very high in Mpesa agent operation.
Lack of skills and detection Kits were the main challenges facing Mpesa agents in the
deterrence of counterfeit banknotes fraud. Other challenges facing Mpesa agents in the
deterrence of counterfeit banknotes fraud includes Poor enforcement and coordination
mechanism, easy counterfeited Security features on bank and Lack of advanced
technology. The study further revealed that only a few M-pesa agents use detectors due to
their high prices of acquiring the device. Mpesa Agents were prioritizing training so as to
be in a position to recognize the fake money and are continually reviewing and
improving on their internal controls such as surveillance and internal audit, primarily in
the defense against fraud. The technology was also another major factor that was limiting
the implementation of the strategies. The study recommended the central bank of Kenya
to research and develop new notes with innovative security features that are both easy to
check and hard to counterfeit. To fight counterfeit, the Bank needs to offer free training
materials to help the public business and police agencies use the security features in
genuine bank notes. The study recommends further research to be done to establish other
challenges other than deterrence of counterfeiting that is facing Mpesa business in
Nairobi City County
Description
A Project Submitted in Partial Fulfilment of the Requirements for the Award of the Degree of Master of Arts in Leadership and Security Management in the Department of Security and Correction Science, School Of Security, Diplomacy and Peace Studies of Kenyatta University, October, 2019