PesaPal launches school fees payment platform

Long queues in banks during school opening days will soon be a thing of the past thanks to technology that has paved way for parents to pay fees through mobile phones.

PesaPal—an online payment gateway in partnership with Safaricom and some banks have launched a platform that allows one to pay fees directly to school banks accounts through a mobile phone, eliminating the risks associated with sending money to third parties and reducing bank transaction fees.

At the moment, some parents send school fees to head teachers’ or bursars’ mobile phones then they withdraw and pay it to the schools.

But now, parents can pay the school directly through PesaPal’s system dubbed Schoolpay at no fee.

The schools that have linked their accounts to the web-based platform pay Sh10,000 per term.

“We are giving schools one free term and then we will charge Sh10,000 per term,” said Agosta Liko, the chief executive officer of PesaPal said.

After a parent sends the fee it is first deposited at PayPal’s trust accounts or the mobile providers’ trust account where it is then transferred to the respective school accounts.

At the moment, Kenya Commercial Bank, Cooperative Bank and CFC hold trusts account.

Mr Liko said Schoolpay will enable over 30,000 secondary and primary schools in Kenya go hi-tech by receiving and managing mobile payments from parents electronically.

Already, more than 90 schools have signed up to offer the service starting next term.

“Our approach is to enable any Kenyan with a mobile money product to pay online safely, ” said Mr Liko.

The Schoolpay system will enable schools track money paid for various activities like trips, activity, lunch, easily than the current mode where parents just pay in lumpsum through the bank.

It will also enable bursars track fees paid through credit cards and allow those who are abroad to pay fees using Visa, MasterCard and American Express.

SchoolPay uses PesaPal technology to track school fees payments from mobile money, PesaPoint or credit cards.

Mr Liko said schools will save up to 80 per cent of the current costs incurred in receiving school fees.

Other than Safaricom, PesaPal is talks with the other three mobile operators to use their services.

The company is also in talks with Kenya National Examination Council in a deal that it says will eliminate the issue of teachers not registering candidates for national exams or the misuse of the money.

PayPal’s move comes at a time when online transactions are gaining acceptance in Kenya with many consumers buying things through the internet.

Improved telecommunication infrastructure and legal frame work has paved way for increase uptake of Internet.

In 2009 the government enacted electronic laws that have given consumers more confidence transacting online.

Other than PesaPal, other companies that have developed gateway payment include Interpid.

Interpid Data System is in a partnership with Safaricom and Airtel to allow online buyers of goods to use either M-Pesa or Airtel money transfer services to pay for their goods through a new platform, iPay.

The money is only released to the seller after confirmation by the buyer that the goods have been delivered.

Interpid Data System managing director Steve Nyumba said the main challenge facing the sector has been creating confidence among online shoppers that their money is safe.

“We have entered into an agreement with Safaricom and Airtel that allows them to hold the money for a period before it is released to the merchants,” said Mr Nyumba. “The time frame depends on the volumes of trade, and can be a weekly circle.”

However, this does not include those selling products that are on digital formats such as music stores, online book stores, publishers, video libraries, e-ticketing, consultancies, donor supported organisations and premium content providers.

Experts say there is more room for launch of online products.

The industry regulator is currently working on online authentication framework that will enable it to license electronic certificate providers, a move that will boost confidence among users spurring growth.

The Communications Commission of Kenya (CCK) said the providers will be in charge of issuance, renewal, suspension, reinstating and revocation of the certificates.

This will make online or web-based transactions secure and facilitate signing of e-mail or electronic documents to ensure the integrity of their content.

In February last year, the country moved a step ahead in making e-commerce a reality by recognising electronic documents in the Kenya Communication Amendment Act 2009.

However, it is yet formulate guidelines for licensing and regulating electronic signature providers.

CCK is yet to license third parties to certify electronic contracts and signature.

Their absence in the wake of the fast move towards electronic commerce and the government adopting online services in the Judiciary, Immigration, land transactions and other departments, sets stage for fraudsters to forge electronic signatures.

Licensing of third parties to issue certification on electronic contracts and signatures is expected to provide the confidence needed in online transactions since one can verify electronic contract documents or signature through the providers.

“The Commission is developing the regulatory framework for this sub-sector. Once this exercise is completed, the public and the industry shall be informed,” said CCK director general Charles Njoroge.