Many transactions in Kenya are still in cash and informal cash payments.M-PESA has always been at the forefront of pushing Kenya to a cashless economy. But M-PESA is now facing renewed competition from Visa and Mastercard who have intensified their activities in Kenya in the last couple of months.
What are the card companies up to?
Visa has launched a campaign to drive education around card usage in Kenya. The campaign dubbed 'kick the cash' aims to demonstrate the advantages of using cards for daily transactions instead of using cash.
Mastercard has partnered with Nakumatt, East Africa’s largest retailer,to introduce the multi-currency EMV MasterCard PayPass Prepaid loyalty card to over one million of Nakumatts loyalty program members in the coming months. This is the largest prepaid merchant agreement for MasterCard in the Middle East and Africa region, to date.
Stakeholders in the Kenya plastic money industry including MasterCard, regional card processor Paynet and global security printer De La Rue have launched a campaign in Nairobi dubbed “the great migration to EMV. This aims at encouraging Kenyan banks to abandon the old magnetic stripe platform used for ATM, credit and debit cards and instead issue their customers with new high security, multifunction chip and pin cards.
M-PESA is well loved by users
The success that M-PESA has is attributable, in part, to a lack of a traditional infrastructure and alternative conventional payment media. M-PESA suggested itself as a solution to a population deeply in need of a fast and secure method of payment.
M-PESA now has 15.2m registered customers; 9.7m of whom actively use M-PESA at least once every month who make atleast 270 transactions per second.
Who will prevail?
An average of 1.8 Billion Kenya shillings is transacted daily on M-PESA inform of P2P (person-to-person) payments. Safaricom is actively pushing M-PESA for C2B (customer-to-business) payments among the thousands of small and medium enterprises in Kenya.
Card companies with the help of banks are determined to compete with M-PESA.According to the Central Bank of Kenya data, the number of debit cards issued now stands at 8.1 million cards with transactions worth Ksh386.6 billion.
Hands-down domination in payments in Kenya is set to intesify in the coming months. But is it merchants who will eventuallly decide who wins the cashless battle in Kenya.