Wellness & Fitness

Visa’s mobile till opens new front in healthcare payments

visa

Visa’s step is timely given the mobile money has been eating into cards’ share. FILE PHOTO | NMG

The Kenyan fintech ecosystem is at a more advanced stage than in most countries regionally and globally. According to 2017 Central Bank Kenya financial year report, the value of mobile money transactions reached Sh3.77 billion.

Safaricom’s M-Pesa is the biggest player in mobile payments followed by banks with platforms such as Equity’s Eazzy and KCB’s Mobi.

Money also flows from a bank to M-Pesa at some point. The main reason being Safaricom’s large population of accepting merchants and payers.

Last week, I came across a promotion crew of card transaction handler Visa’s new mobile-powered till — payment system being marketed at my local supermarket. Visa’s shift is a timely pivot given the mobile money has been eating into cards’ share in the payment platforms.

Looking at the number of card accounts versus mobile money accounts, it is easy to see the logic behind the shift in strategy, at least for Kenya, Africa’s most exciting mobile payments playground.

Most people own multiple cards and use them for cash withdrawals and online payments. Once in a while they swipe them, payments are either bank-M-Pesa.

By putting the VISA card on a phone, a key issue discouraging card usage is being solved — convenience. I almost always have my phone, not so for ATM cards.

Secondly, many rural people do not have cards despite having bank accounts. The entry level of getting a VISA card being an average of Sh500-Sh600. In my former workplace, the nearest bank was a 150km to and fro journey costing Sh1,000. For small income earners paid through banks, this is a loss on their salary.

The new product has advantages and more acceptors on the new platform will go a long way to its adoption.

As far as the health ecosystem payments go, three kinds of payments happen. Small payments often are by cash, especially for outpatient services. Pharmacies account for 45 per cent of these. Complex services such as admissions and procedures, a mix of cash, mobile money and cards are employed.

What VISA opens up with its till-based platform is a potential business-to-business payments for SMEs too.

A clinic with a revenue of Sh4 million in a year may use close to 50,000 for commission and transaction fees. M-Pesa being a big taker. If VISA can lower this and work with health industry players then a good fight is in the offing, by eliminating transaction fees for transferring money to bank accounts from M-Pesa.

Secondly, if many banks board the platform, more users may buy in. As the expenditure on healthcare rises the proportion of these funds passing through mobile services is high given the trends elsewhere.