The global health crisis has brought concerns that cash payments act as a conduit for the virus. In the aftermath of the Coronavirus pandemic in the country, the government of Kenya has deemed it fit to include country in the spectrum of being a completely cashless society.
In recent times, the shift to a cashless society is already taking place and while Kenya may not be fully ready to switch over completely to a cashless economy, financial institutions including credit and debit card firms are more than willing to support this revolutionary idea. The merit of a cashless transportation system is manifold, particularly in the developing world, where city centre swelling with rural migrants is experiencing increasing over congestion.
The East African nation has long been a forerunner in terms of digital payments in Africa. With the introduction of M-Pesa in 2007, Kenya also became a global pioneer in mobile payments. This evolved the dynamics of Kenya’s economy by eliminating the dependence on physical cash, and driving financial inclusion.
Kenya has around 10 million card holders. Though, only a few people use their cards for online payments. This indicates that there is a huge potential in the online payments market segment. The accessibility of mobile money, the share of the population with access to financial services has gone from 14% in 2006, to above 80% as of 2020.
Today in Kenya, cashless payment uptake has grown in the public transport sector as more passengers and service providers continue to take up the service. The country has also been trying to manage the spread of the Coronavirus through exercises such as cashless payments, all supported by a strong payment system foundation.
Last year, the Kenya government through the Ministry of Transport introduced has introduced a cashless payment system for the public transport sector, which despite criticism and resistance from the players in the sector, witnessed a number of firms bring on board their ‘innovative’ solutions to address the e-payment of fare in Public Service Vehicles.
In January, National Safety and Transport Authority (NTSA) announced the licensed 29 companies will offer a platform for cashless fare payment service. Telecom giant Safaricom is one of them. Other firms authorized to offer the cashless fare system are KCB Bank Kenya, Cellullant, NCBA, JamboPay, and Craft Silicon.
When the system is operational, all passengers will be required to pay their fares via mobile money platforms, giving the government access to their identities and personal contact information that is needed to combat the coronavirus disease.