Cashless matatu fare system to undergo Central Bank scrutiny
A Compliant MOA bus: CBK nod required to ensure commuters’ deposits are safe. Photo/FILE
What you need to know:
New regulations will demand the integration of cashless fare payment systems from different service providers to allow for a common swipe gadget.
Pre-paid passes will be in line with the high security debit and credit cards being issued by banks to replace the magnetic strip-type card that is prone to fraud.
A number of firms, including Safaricom (the provider of Lipa na M-Pesa) have introduced cashless payments.
Firms seeking to offer the cashless fare payment will have to seek approval from the Central Bank of Kenya (CBK) to safeguard commuters’ deposits, ahead of the July 1 deadline.
Francis Meja, the director-general of the National Transport and Safety Authority said the new regulations, which will be released on Friday, provide for the CBK approval.
He added that the regulations will demand the integration of cashless fare payment systems from different service providers to allow for a common swipe gadget.
“There will be no situation where passengers have to use different cards for different gadgets, or for the commuters to be told that their cards are not compatible with a given machine,” Mr Meja said Thursday in a phone interview.
“The service providers must get approval from the Central Bank. This should offer comfort to commuters who will have their deposits in cards. We don’t want a situation where someone collects money and then disappears.”
The system enables commuters to pay their fare automatically by tapping their prepaid cards on electronic gadgets.
Mr Meja said the pre-paid passes will be in line with the high security debit and credit cards being issued by banks to replace the magnetic strip-type card that is prone to fraud. The new generation cards are chip-based.
A number of firms, including Safaricom (the provider of Lipa na M-Pesa) have introduced cashless payments.
Others are Google in partnership with Equity (Beba Pay) and a Hong Kong firm TaptoPay that has partnered with KCB and Mastercard with their pre-paid plastic called Abiria Card.
Streamline industry
Matatu operators under the investment vehicle dubbed Compliant MOA , which plies Jogoo Road, Eastleigh and Ngong Road in Nairobi, are served by 1963 Jinice.
These firms stand to rake in at least Sh2.18 billion annually in revenue by processing fare payments for PSV operators for a one per cent commission fee.
Official data show Kenya’s public transport industry generated Sh218 billion in revenues last year, up from Sh205 billion in 2012 and Sh155 billion in 2009.
The introduction of cashless payment is part of a wider strategy by the government to streamline the chaotic matatu industry.
The multi-billion untaxed industry has more than 22,000 licensed PSV operators, according to the traffic licensing board.
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