PrivPay

Private M-PESA transactions

Epitaph

“Here lies PrivPay. It let Kenyans transact on M-PESA without baring their details to merchants, built entirely on Safaricom's Daraja API. When the attention came, so did the compliance questions; Safaricom cut the API off, and a business with no licence had nothing left to run on.”

Overview

Born: 2022 (Year)
Died: May 2023 (Month)
Lifespan: 16 months
Fate: Shut down
Headquarters: 🇰🇪 Kenya
Category: Fintech
Primary cause: Regulation
Contributing causes: Infrastructure dependency, Execution

Death certificate

Timeline

2022PrivPay founded
Kenyan fintech launches a service allowing private M-PESA transactions via the Daraja API
May 2023Safaricom suspends access
Safaricom cuts PrivPay's paybill/API access over compliance concerns, including lack of a PSP licence
May 2023Shutdown
PrivPay ceases operations after losing its M-PESA connectivity.

Autopsy report

Why did PrivPay shut down?

Kenyan fintech PrivPay, which let users transact via M-PESA without revealing personal details, shut down after Safaricom terminated its Daraja API/paybill access in May 2023 over compliance concerns, including the startup's lack of a Payment Service Provider licence from the Central Bank of Kenya.

What PrivPay attempted

Build a privacy-focused fintech layer on top of M-PESA using Safaricom's Daraja API, letting customers transact without exposing personal details to merchants.

What worked

Reportedly reached about 30,000 users and initially operated with Safaricom's tacit support before drawing regulatory scrutiny.

Early warning signs

Increased media attention on PrivPay's model preceded Safaricom's crackdown; the startup had not obtained a Payment Service Provider licence from the Central Bank of Kenya, which a former executive said was due to the resources required.

What happened

PrivPay built its service around Safaricom's Daraja API and initially had Safaricom's support, but after gaining media attention, Safaricom concluded the business model was not permitted, citing anti-money-laundering compliance concerns and the lack of a PSP licence; in May 2023 Safaricom suspended PrivPay's M-PESA paybill/API access, cutting off its ability to process transactions and forcing the startup to shut down.

Lessons for future builders

Building on one provider's API with no licence of your own means that provider can end you at will. Secure your own regulatory standing and a fallback rail before scaling on borrowed infrastructure.