MasterCard is following in the footsteps of Google’s BebaPay and Safaricom’s M-Pesa to introduce a service that will enable commuters to pay fares using mobile money ahead of a ban on cash fare in July.
Travellers will have to tap the cards on a mobile phone or gadget to pay fare instead of swiping the plastic money.
The New York-based financial services firm said it will extend the cashless payment solution, which will be launched by June, to convenience stores, gas stations, grocery stores, pharmacies, vending machines and parking lots— which all require faster settlement of bills to deal with queues.
It plans to roll out cards dubbed MasterCard Paypass to be used at point-of-sale (POS) terminal to pay —eliminating the need to swipe or give your card to cashiers when making payments.
“MasterCard is keen on playing a significant role in the mass transit sector and is already working with local banks for the implementation of the relevant payment technology for Kenyan consumers,” said James Wainaina, MasterCard’s vice president and area business head, East Africa.
“Contactless is ideal for quick payment environments where speed and convenience matter most—from major retailers and quick service merchants.”
The contactless payment systems use a technology dubbed Near Field Communication (NFC).
The government has gazetted regulations that will outlaw the use of cash for bus fare payments starting July 2014.
Mr Wainaina says MasterCard provides contactless payments solutions for the transport sector in 63 countries.
Visa last month announced that it will introduce in Kenya its contactless payment cards dubbed Visa payWave where users wave the card in front of a reader or POS to complete a transaction.
Firms are seeking a slice of Kenya’s lucrative public service vehicle (PSV) industry valued at Sh205 billion and is dominated by matatus, buses, boda-bodas and tuk tuks.
This has whetted the appetite of Safaricom, MasterCard, Visa, Equity Bank and Google who stand to rake in at least Sh2.05 billion annually in revenue by processing fare payments for PSV operators.
READ: Equity eyes matatu billions in card venture with Google
This is based on Safaricom’s Lipa Na M-Pesa commission rate paid by traders and matatu owners which is one per cent of total transactions processed.