Kenyan Startups Clash With Established Lender In Ownership Tussle

A Kenyan startup duo is entangled in a legal dispute with one of the country’s established lenders Ecobank Kenya over the ownership of the bank’s popular savings platform, ‘Save As You Spend’, which was launched in March last year to assist millions of informal workers in their savings endeavors.

Court documents reveal that Jipay Payment Solutions Limited and Ashanti Pension Insurance have jointly filed a lawsuit against the bank, asserting their ownership rights over the ‘Save As You Spend’ product, local publication Business Daily reports. These startups claim that Ecobank Kenya deployed the platform without their consent, despite initial discussions about the acquisition of the platform’s license occurring seven months prior.

However, Ecobank denies the allegations, arguing that the platform had been operational in its West African markets since 2015. The bank asserted that the product’s rollout in Kenya was unrelated to its earlier meeting with the two startups in August 2021.

The legal battle reached the Industrial Property Tribunal, which recently made a crucial interim ruling. The tribunal allowed Ecobank Kenya to continue using the platform pending a final hearing. Their decision was based on the potential inconvenience millions of the bank’s customers would face if services were abruptly halted.

“The balance of convenience would, in the view of the Tribunal, tilt in favour of the respondent who has been exploiting the ‘Save as You Spend’ and whose customers would be greatly inconvenienced if the respondent were to be ordered to stop offering the service,” the court ruled.

According to Ecobank Kenya’s official website, the ‘Save As You Spend’ platform enables customers to save 10 percent of any amount they spend automatically, a feature designed to promote financial prudence among its users.

Jipay Payment Solutions Limited, in particular, had ambitious plans for the platform. They aimed to target 15 million informal workers in Kenya, assisting them in automatically saving 10 percent of their expenses. This initiative was intended to foster financial independence during old age and retirement.

Crucially, documents submitted before the tribunal revealed that Ashanti Pension Insurance had officially registered the savings model in October 2020. It was only in March 2022, through social media and billboards, that the startups became aware of Ecobank Kenya’s use of their product.

The tribunal raised a pertinent question: why did it take the startups more than a year to challenge the unauthorized use of their platform? While this issue looms large, the battle for ownership and control of ‘Save As You Spend’ continues to unfold in Kenya’s legal arena.

This clash between innovative startups and a banking giant serves as a compelling reminder of the complexities surrounding intellectual property rights and the rapidly evolving fintech landscape. As this legal saga unfolds, the fate of ‘Save As You Spend’ hangs in the balance, impacting not just the involved parties but the wider community of users who rely on this platform for their financial stability.

Featured Image Credits: NMG