Phone flashing will derail our digital inclusion
The bad actors enabling phone flashing are undermining the very foundation of the Buy Now, Pay Later framework.
Kenya has emerged as a digital leader in Eastern Africa, according to the 2023 Eastern Africa Youth Digital Readiness Index.
The study, which analyses technological adoption, digital skills, government support, and enabling infrastructure in ten Eastern African countries – including Kenya, Somalia, Uganda, Tanzania, Rwanda, Burundi, Ethiopia, South Sudan, Sudan, and the Democratic Republic of Congo (DRC) – ranks Kenya at the top with a score of 26.75. The closest challenger is Rwanda, with a score of 19.85.
Mobile technology, particularly smartphones, has been a catalyst for Kenya’s digital transformation. Access to affordable smartphones has unlocked opportunities for millions of Kenyans across various sectors of the economy, including e-commerce, education, communication, health, and financial services. In its latest report, GSMA identifies policy reforms and innovations in mobile technology as the key drivers of Kenya’s digital transformation.
With initiatives like the Buy Now, Pay Later (BNPL) financing model, millions of Kenyans now have access to smartphones. This model is built on trust – trust that consumers will meet their credit obligations over time, usually up to a year.
It has allowed Kenyans who could not previously afford smartphones to acquire devices that connect them to the digital economy. However, this promise is marred by the growing threat of phone flashing. The rise of phone flashing – an illegal practice in which fraudsters bypass software locks on financed phones – poses a significant challenge to the sustainability of the BNPL model and, consequently, to digital inclusion. If left unchecked, this challenge could undo the gains the country has made in democratising access to technology.
The bad actors enabling phone flashing are undermining the very foundation of the BNPL framework. To illustrate the extent of this menace, between July and September 2023, the BNPL industry lost over Sh100 million in the value of mobile devices that were flashed, with customers defaulting on their payments without facing any repercussions.
We consider such devices effectively stolen and bad debt in our books. But the impact of phone flashing extends far beyond financiers. It also affects the phone retailers who depend on partnerships with BNPL providers to sell their devices.
What makes phone flashing particularly alarming is how openly it is being advertised. A quick search on social media platforms, especially TikTok, reveals numerous accounts promoting phone-flashing services in Kenya.
These hackers are working overtime; not only are they using sophisticated techniques to bypass the security measures we continue to implement, but they have also created step-by-step tutorial videos on phone flashing. The police must intensify their efforts to crack down on phone-flashing syndicates.
On the other hand, policymakers must enact legislation that explicitly criminalises phone flashing and imposes severe penalties on offenders. As we celebrate the strides we have made in digital inclusion, we must remain vigilant in protecting these gains from those who seek to exploit them.
Mr Massawe is Watu Country Manager
