Matatu association takes on Google, Safaricom with cashless fare service
From left: Matatu Owners Association chairman Simon Kimutai, Nairobi senator Mike Mbuvi Sonko and Tigania East MP Mpuri Aburi during the launch of the cashless payment system on Tuesday. Photo/Salaton Njau
What you need to know:
The Matatu Owners Association (MOA) Tuesday launched its own service provider in the race to lock in the bulk of the Sh205 billion generated by the public transport business.
The association says it will offer credit to commuters via its cashless products and charge other PSV operators less than one per cent commission.
A matatu operator has launched the cashless fare payment system, taking on banks and technology firms that are eyeing a piece of the public transport business, ahead of the July 1 deadline.
The Matatu Owners Association (MOA) Tuesday launched its own service provider in the race to lock in the bulk of the Sh205 billion generated by the public transport business.
The 1963 Jinice is the latest firm to introduce the cashless payment service and will battle with Safaricom (Lipa na M-Pesa), Google in partnership with Equity (Beba Pay) and a Hong Kong firm (TaptoPay) as the government maintains that the ban on cash transactions on public transport remains July.
The association says it will offer credit to commuters via its cashless products and charge other PSV operators less than one per cent commission.
Other operators like Safaricom charge one per cent commission, meaning that the service providers stand to rake in at least Sh2.5 billion.
“We want to be self-reliant as well as ensure that the operation cost of this service is low as compared to what other parties would offer,” said Simon Kimutai, the chair of MOA, at the launch on Tuesday.
The operators say they will offer commuters credit equivalent to 10 per cent of their usage in a service akin to Safaricom’s Okoa Jahazi airtime loan.
Besides the PSV business, MOA is also associated with Invesco Insurance, which it helped revive after it was placed under statutory management in 2008.
Invesco is one of the two remaining underwriters of PSVs, the other being Directline Assurance.
Blue Shield Insurance, a third PSV underwriter, was placed under statutory management in 2011 for failing to pay claims arising from the public transport business.
“This is our system and it will work in our favour. We will never experience situations where service providers will be adjusting the commission paid at will,” said Mr Kimutai.
Global payments processing firms Visa and MasterCard have also announced plans to roll out similar cards, highlighting the increased interest in digitising Kenya’s chaotic matatu industry.
The introduction of cashless payment is part of a wider strategy by the government to streamline the industry.
The system, among other things, is meant to curb erratic increases of fares based on weather patterns, traffic flow and other considerations and enable the Kenya Revenue Authority KRA to collect taxes from the industry.
The National Transport and Safety Authority (NTSA) is working on integrating the different service providers ahead of the July 1 deadline by having a common swipe gadget that can accept the multiple cards.
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