Digital payments in East Africa (Part I): Card payment alternatives

Card payment alternatives in Kenya by pesa-africa

Card payment alternatives in Kenya by pesa-africa

Kenya and East Africa are actively transitioning to cashless payments systems. East Africa’s economies are largely cash based informal economies with its associated costs. Challenges in aggregating national transaction data, consumer spending patterns, tax administration there is really no shortage of incentives.

With no means to track sales, little data is available, and channels are too fragmented for companies to forecast production and distribution with any degree of accuracy.
Niti Bhan

Policy makers, governments, central bankers and the private sector are looking to cash in on the benefits of culturing digital payments for the Kenyan market; a variety of emoney and digital currency payment options thrive in Nairobi – the capital.

Central Bank of Kenya data reveals a total of 10million cards in circulation as at January 2013 in the local card payments industry.

Here is a basket representative of card payment alternatives in Kenya. [Read more…]

PesaBit #003 : Why the Matatu Cashless payment initiative failed

bebapay-googleafrica-tweetA little more than a year ago, Equity Bank and Google partnered to offer Nairobi commuters NFC based prepaid cards and simultaneously equipped matatu touts with android phones accepting NFC payments. No issuing, acquiring and transactions fees were involved; matatu owners now had an auditable tool to aggregate daily collections straight into their bank accounts. In light of Kenya’s fast tech based economy, on paper and high up in the boardrooms, this was ostensibly a brilliant idea.

Today, the online business daily ran a title “Family bank joins quest for cashless fare license”. The Kenyan Government has been keen to formalize the 218 Billion ($ 2.44 billion) public transport industry – matatus (collectively, vans and buses). Despite its obvious far reaching implications on curbing corruption, inefficiency, regulation and taxation– the move hit a snag and I wonder if Family Bank have an alternative to where its predecessors – Equity Bank and Google fell short. [Read more…]