My takeaways from E-payments panel at Connected 2016


I was delighted to sit on an electronic payments and the future of cash panel at the connected 2016 conference. As co-founder and Chief Analyst at Umati Blockchain ltd., my invitation scope was Bitcoin, virtual currencies and the blockchain. It was great getting feedback from the audience, on what is wrong with Kenya’s cashless transition. A healthy nuance of talking points emerged from the mixed backgrounds of the panelists.

Here is a 30 min edited video of the panel session

These were my takeaways


This came up on custody of users’ funds. For this reason, wallets in Kenya are centrally issued and regulated by the National Payments System Regulations (pdf). Issuers of money require a license, and it makes sense from a legal POV.

It is fairly easy to build trust for money issuers who till now, have mostly been Telcos and Banks. For virgin startups looking to break into this space, trust from both customers and potential partners (like banks) takes time, given their short lifecycles (75% that don’t make it).

Friction of payments

The number of steps to execute e payments in Kenya was identified as a hinderance to a smooth user experience. Why so many steps in making a simple payment? Can the process be made smooth(er) ?

Mobile wallet payments in Kenya today are at least 10 steps of multiple entries of strings of texts. People definitely want an upgrade, an intuitive payment process. What they are less certain of, is exactly how this process will look like.

As an example, I personally find the current Mpesa wallet steps frustrating. I effing loathe the user experience! Now in its 10th year since launch, very little has changed in terms of how it works on the user end.

Closed walls and non-interoperability of payments

Breaking down Kenya’s closed gardens and having common payment standards, is an issue that is coming up again and again. Not just at the conference, but on industry and policy discussions too.

I mostly zoned out here, because I feel we keep going round in circles, talking about the same problem over and over, whilst, the answer seems clear to me. The problem is architectural, the foundation of Kenya’s electronic payments are proprietary, and this manifests itself at the user level. No one wants to open up and share.

For example, having to pay a premium because your mate is on a different mobile network.

In Kenya issuers of electronic money are either

  • Telcos,
  • Banks partnering with card companies
  • A bank with an MVNO license.

At this point in time, all are angling for market share and will drag out these silos for as long as they can. Meanwhile, it is us, the users who pay for non-interoperability.

Legislation in Kenya lags innovation

This theme is generally true across the world. But, Kenya’s pace to introducing legislative structures to respond to change is painstakingly slow. Technology in general, is accelerated change, so its worse.

Danson Muchemi, CEO at JamboPay filled us in on how his payment gateway design was built on the City Council’s antiquated manual process flow. Thus, appending unnecessary multiple steps on JamboPay’s app. What is the point of automating council fees then?

While NSSF payment processes have been automated, Peter Muiruri CIO pointed out users still need to print out e-receipts, walk to an NSSF office and have them notarized. Fidelis Muia, Director at Kenya’s Bankers Association, clarified this was not a problem of law recognizing digital evidence, as happens with truncated cheques, but rather, with the parent act, the NSSF act that states a manual paper should be produced in cases of litigation.

The User

Lack of interoperability, closed systems, lack of open APIs, high transaction fees for low payments, friction of payments all affect users. There are obvious gaps to better the overall experience, and in my opinion, it is direly needed.

Kenya has enough mobile wallets penetration that is a great foundation for launching ‘cooler’ payment products. Whether in user experience, fees, technical improvements and the as yet to be imagined.

I believe there is a real need for digital wallets on an open layers for anyone, and this is holding back the Kenyan electronic payments space.

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