Safaricom has deepened its turf war with the banking sector by launching an M-Pesa payments platform for restaurant bills in partnership with Eat Out Kenya, an online restaurants guide and booking website.
The service, which costs 1.5 per cent of the value of transactions, is priced at about half of what users of credit cards pay for services.
Safaricom’s M-Pesa service is already the dominant money transfer platform and is also used by firms for payment of utility bills.
The increased usage as a platform for payment for goods and services will see the telecommunications firm deepen its foray into the financial services sector.
“We are already at petrol stations, and in addition we have about 4,000 paybill merchants and 1,600 firms that use M-Pesa for utility payments,” said chief executive Bob Collymore Tuesday during the launch of the service.
The mobile phone firm is also partnering with Kopo Kopo, which offers a platform for SMEs to accept payments via M-Pesa.
“We have a network of 300 restaurants over two years, while Kopo Kopo has 3,000 outlets including restaurants that utilise it to take payments. We piloted the system with bars, and now are stepping up to middle and high end restaurants,” said the Eat Out Kenya director Mikul Shah.
Mr Collymore said the platform gives restaurants an opportunity to offer convenient service to clients.
He assured the partners in the venture over the safety of the M-Pesa money transfer system, saying Safaricom has experience in handling such payments.
Banks have been moving towards the chip-based cards following the recent increase of ATM-related fraud that has eroded public confidence in the plastic cards system. They have pledged to spend Sh2.5 billion in the next six months to replace the magnetic strips cards which are more prone to fraud.
According to data from the Central Bank of Kenya on retail transactions, the number of credit and debit cards stood at 138,011 and 9,063,905 respectively as at December 2012 , up from 122, 212 credits cards and 8,548, 390 debit cards during the same period the previous year.
Safaricom says it processes two Sh2 billion transactions in a day on its M-Pesa platform in form of two million cash transfer transactions, rising to six million when one includes the airtime top up transactions from its estimated 16 million M-Pesa customers.
Kopo Kopo is a merchant aggregator for M-Pesa buy goods that identifies and helps businesses that need to utilise the M-Pesa pay goods service to set up the service and train personnel on the use of the service.
“This is similar to the bank model where you swipe your card and the business owner pays a percentage of that transaction in order to accept the payment. We have a similar model except that our transaction fee is significantly lower than if you were using a card,” said the chief executive officer of Kopo Kopo, Dylan Higgins.
Banks have also been raising the stakes in the use of plastic cards to buy goods and services, with Equity Bank for example introducing a technology in January which enables cashless buying by placing mobile phones or cards in close proximity to a point-of-sale terminal without actual contact.
Point of sale terminals are fitted with the MasterCard technology that requires just swiping of phones to conclude a transaction.
Data from Central Bank of Kenya, showed that cashless transactions grew by 77.9 per cent in the first nine months of the year.
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