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Commuters win as cashless fare system embraces integration

A public service vehicle in Nairobi.
A public service vehicle in Nairobi. Integration of cashless fare system will make it convenient for commuters to settle payments regardless of service providers. PHOTO | FILE | NATION MEDIA GROUP 

It will now be possible to use your commuter card on any matatu or bus operating after the government forced cashless fare providers to integrate their platforms to allow seamless use across rival networks. This means that a passenger holding a BebaPay card – a product of Equity Bank and Google – can board and pay fares on Kenya Bus Service (KBS), which exclusively uses Abiria card.

The government also instructed providers of cashlite fare systems to ensure their mobile point-of-sale (mPOS) accept payments from all rival card brands and generate mini-receipts.

The interoperability of all commuter cards comes as a big win to consumers who have finally been spared the hassle of acquiring multiple plastic cards for use along different routes and operators.

The move to allow travellers to tap their preferred plastic cards across all cashlite matatu networks is part of the government’s strategy to ensure the success of the project ahead of the revised December deadline for a ban on cash transactions.

“This will offer convenience to passengers as they do not need to invest in multiple cards,” said Lee Kinyanjui, chairman of the National Transport and Safety Authority (NTSA). “Most matatu saccos have made progress in acquiring cash-lite systems,” said Mr Kinyanjui who heads the agency charged with the responsibility of digitising the matatu industry.

The opening up of the matatu payments network will also spur competition in the market and give commuters a free hand to choose a provider based on quality of service of value added benefits.

KCB Bank, which is issuing Abiria cards, said the plastic uses ‘tap and go’ technology and can be used in any public service vehicle (PSV) to make fare payments.

“The Abiria card is a MasterCard branded NFC card and will be used on other platforms both on public service vehicles and other platforms both locally and internationally,” said Dennis Njau, head of channels at KCB Bank.

Mr Njau said the Abiria pre-paid card can also be used to pay for shopping and withdraw cash from ATMs anywhere in the world.
Co-operative Bank, which is set to unveil its cashless matatu fare system today, said the cards would be seamlessly used across the market.

“It will offer the widest range of payment options and the highest degree of interoperability compared to other systems on the market,” Co-op Bank said in a statement.

Tangaza Pesa, a mobile money provider, was last week given the go-ahead to launch a service where travellers will settle bus fares using plastic cards. Oscar Ikinu, chief executive of Tangaza Pesa, said the company’s mPOS will accept cards from other providers approved to offer matatu payments.

The Tangaza Pesa PSV card will see commuters pay fare by tapping the card on a mobile phone or mPOS to pay for bus tickets.
NTSA is working with the banking sector regulator to licence cashlite fare providers.

The agency requires providers of cashless matatu payment systems to seek clearance from the Central Bank of Kenya (CBK) as a strategy to ensure commuters’ deposits are protected. The State has so far authorised Equity Bank, KCB Bank, Co-op and Tangaza Pesa to handle matatu fare payments

Kenya’s public transport passenger service market raked in revenue worth Sh218.1 billion last year and is dominated by matatus, buses, boda-bodas and three-wheelers popularly known as tuk tuks. This has whetted the appetite of banks and mobile money providers who stand to rake in at least Sh2.1 billion annually in revenue by processing fare payments for PSV operators.

The lenders are also looking to mobilise cheap deposits from the fare collections. Family Bank and DTB have also eying the lucrative but chaotic matatu sector with plans to roll out services which allow users to pay fares using plastics.

The government last week pushed back regulations that will outlaw the use of cash for bus fare payments to December from the earlier date of July after matatu operators asked for more time to comply.

Matatu owners have said they support the shift to use of plastic cards to pay fares saying it will help them earn more income by sealing revenue leakages associated with cash.

“I am a great supporter of this move because cash is a big headache in the matatu industry. There is a lot of extortion, gangs and bribery in the sector due to cash,” said Simon Kimutai, chairman of Matatu Owners Association.

KCB Bank reckons that digitising fare payments in the matatu industry will help passengers plan their travel budgets better and drive financial inclusion in Kenya.

“It will increase access to credit facilities to matatu operators,” Mr Njau said adding that banking daily revenue will allow lenders to better appraise matatu owners for loans.

Analysts say the move to cashless transactions in Kenya’s chaotic matatu sector will help the Kenya Revenue Authority collect data on tax compliance and enhance payment of income tax by matatu owners.

The data to be generated by the cashless systems on journey patterns, travel directions, profile of passengers and value of the industry will be exploited by businesses and marketers to further explore the value of the PSV sector.

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