SHA-256 Hashing for Customer Phone Numbers in Safaricom's C2B API

Introduction

In response to the growing concerns over data privacy and spamming, Safaricom has implemented the use of SHA-256 hashing for customer phone numbers in their Customer to Business (C2B) API. This move aligns with the requirements of the Data Protection Act (2019) and aims to protect customer data while still providing essential transaction information to merchants.

Background Context

The Data Protection Act (2019) mandates that all organizations handling customer data in Kenya must minimize the use and transfer of personally identifiable information (PII), such as names and phone numbers, during transaction processing. This legislation seeks to protect customer privacy and ensure data security.

Previously, M-PESA merchants could see the official names, phone numbers, and unique transaction IDs of customers who paid them. This excessive sharing of data led to numerous complaints from customers about their identities being disclosed without their consent. Moreover, some third-party merchants and Premium Rate Service (PRS) partners exploited this information to contact customers without their permission, leading to spamming and reduced customer trust.

The Problem Statement

Excessive data sharing and spamming are major issues. M-PESA merchants often confirm payments using detailed transaction messages that include the payer's name, phone number, and transaction ID. While this information is crucial for verifying transactions, it poses a significant risk to customer privacy. Customers have expressed concerns about their personal information being shared and subsequently used for unsolicited communications.

To address these issues, Safaricom has decided to hash customer phone numbers using the SHA-256 algorithm, thereby protecting customer identities and ensuring compliance with data protection laws.

Understanding SHA-256 Hashing

SHA-256 (Secure Hash Algorithm 256-bit) is a cryptographic hash function that produces a fixed-size, 256-bit (32-byte) hash value from an input of any size. This algorithm is part of the SHA-2 family, designed by the National Security Agency (NSA). SHA-256 is widely used for its strong security properties and is a cornerstone of many encryption protocols and systems.

One of the key features of SHA-256 is that it is a one-way function, meaning that it is computationally infeasible to reverse the hash to retrieve the original input. This makes it an ideal solution for hashing sensitive information like phone numbers, as the hashed output can be shared without revealing the actual data.

Implementing SHA-256 for Phone Numbers

To comply with the Data Protection Act (2019) and address customer concerns, Safaricom will use SHA-256 to hash phone numbers before sharing them with merchants. This means that instead of receiving the actual phone number, merchants will receive a hashed version, which they cannot reverse-engineer to obtain the original number.

Here is a simplified overview of how this process works:

1. A customer initiates a transaction using their phone number.
2. Before transmitting the data, the phone number is processed through the SHA-256 hashing algorithm.
3. The resulting hash value is then included in the transaction message sent to the merchant.
4. The merchant uses this hash value to verify the transaction without accessing the actual phone number.

Benefits of Using SHA-256 Hashing

The implementation of SHA-256 hashing for phone numbers offers several benefits:

• Enhanced Privacy: Customer phone numbers are protected from unauthorized access, ensuring privacy and compliance with data protection regulations.
• Reduced Spamming: By preventing third parties from accessing actual phone numbers, the risk of customers receiving unsolicited communications is minimized.
• Data Security: SHA-256 provides a high level of security, making it extremely difficult for malicious actors to reverse the hash and obtain the original phone numbers.
• Compliance: This approach ensures that Safaricom complies with the Data Protection Act (2019), avoiding potential legal and regulatory issues.

Conclusion

Safaricom's adoption of SHA-256 hashing for customer phone numbers in the C2B API is a significant step towards enhancing data privacy and security. By hashing phone numbers before sharing them with merchants, Safaricom protects customer identities and ensures compliance with the Data Protection Act (2019). This move not only addresses customer concerns about privacy and spamming but also reinforces Safaricom's commitment to data protection and secure transactions.

As data privacy becomes increasingly important, organizations like Safaricom must continue to innovate and implement robust security measures to protect customer information. The use of SHA-256 hashing is a prime example of how technology can be leveraged to achieve these goals, ensuring that customer data is handled with the utmost care and responsibility.