KCB Group will in the next few weeks add four more currencies for Kenya’s neighbours to its multicurrency prepaid card as it seeks to serve more traders in the region.
Johnson Ondicho, head of Digital Channels at KCB Group, said the lender would add the Uganda shilling, Tanzania shilling, Rwandan franc and Ethiopian birr to the multicurrency card taking its tally of the foreign currencies in the prepaid card to 15.
Mr Ondicho said this would eliminate the need for traders to convert currencies multiple times, a source of friction in the cross-border trade in the region.
Currently, the US dollar is a “super currency” that determines the value of all other currencies in the region and how they exchange between each other.
The value of exports and imports between Kenya and the other seven members of the East African Community (EAC) is valued at around Sh390 billion, official data shows.
“So, there is a need for a customer to cut that (three-level conversion) down: The complexity, the process, inconvenience and also the cost,” said Mr Ondicho.
“Because every time you convert to a different currency, there is either a loss of the margins. So those are the things we are trying to resolve.”
Multicurrency cards allow customers to make transactions in various currencies, usually incurring a smaller currency conversion fee compared to standard foreign exchange services.
Last month, KCB Kenya, in partnership with Mastercard, launched a multi-currency prepaid card that supports 11 currencies, including the US dollar, the euro, Chinese yen, and Japanese yen. Other foreign currencies included in the prepaid card, which targets frequent travellers, including cross-border traders and students are the British sterling pound, Australian dollar, Swiss franc, Canadian rand, and the South African rand.
KCB joins other local lenders such as I&M Bank, GT Bank, Standard Chartered, Stanbic and Absa Bank in having multi-currency prepaid cards tapping into the frequent cross-borders movement of people and goods.
Kenyans have also been welded into the global e-commerce, not only buying goods online and paying in foreign currencies, but also paying for services such as Netflix, a streaming video service, in foreign currencies.
While Kenyans in foreign countries can use their debit or credit cards in transactions, they have to grapple with volatility of the local currency as well as settlement fees charged by the issuing bank.
Other individuals targeted by the multi-currency card are shoppers, businesses and corporates.
However, the prepaid card left out currencies from Kenya’s neighbours, despite the high cross-border trader in the region.
