MOBILE MONEY SET TO RIVAL BANK CARDS IN KENYA
Kenya’s leading mobile telecommunications company SafariCom has earlier this week thrown the gauntlet to the traditional plastic money companies when it launched a new initiative, which will allow the use of M-Pesa, aka mobile money, to pay for restaurant bills. A source in Nairobi sent the details that SafariCom was partnering with the Eat Out Kenya Guide, an online service for bookings and the most uptodate guide for restaurants in Nairobi, Mombasa and other towns across the country.
The non cash payment market in Kenya, arguably the most advanced in the entire East African region, is considered hugely lucrative, one reason international card companies have opened offices in Nairobi, and the introduction of payment by mobile money will be ringing the alarm bells in the executive suites of the plastic money operators and the banks working with them.
The expected cost of the transaction, 1.5 percent of the billing value as opposed to in average twice as high charges for conventional plastic money will make the use of mobile money attractive to participating vendors, as it lowers their cost of doing business.
M-Pesa has in recent years become a money transaction force in its own right and is now used in Kenya, and in similar fashion across the region, to pay among other things electricity or water bills, school fees and even taxes, and relevant to tourism for airline tickets. It is expected that payment for fuel, or even groceries, will be the next barrier to be broken, again substituting plastic money or cash with money on the phone.
SafariCom has previously stated that they transact about 2 billion Kenya Shillings of monetary transactions a day, while the Central Bank of Kenya is on record that over 9 million debit and credit cards are in circulation in Kenya, again leading in the region.
Point of Sales technology has also improved in the meantime with mobile phones being able to ‘read and be read’, allowing for ease of transaction as the technology takes root and more and more vendors come on board.
Plastic money operators and conventional bank cards have in recent times seen increased fraud, compelling banks and card operators to convert to chip technology and phase out magnetic strip technology still commonly in use. Foreign tourists are often warned to be careful with the use of their credit cards on ATM’s and in shops and restaurants, as credit / debit card fraud has taken root even in East Africa now but the availability of M-Pesa may now even attract ‘temporary users’ like tourists on shorter or longer holidays.
Kenya’s march into the mobile age is clearly relentless and with SafariCom’s latest initiative remains on the cutting edge. Well done.