May 29, 2013

BebaPay : Google's Mobile Payments Strategy for Africa

I was the first one to blog about Google Beba before the rest of the blogosphere picked it up. (Google Beba has since rebranded to BebaPay and co-branded with Equity Bank). What really caught my eye back then was that Google chose the chaotic matatu transport industry to test NFC payments in Kenya.

 Google is looking to positively disrupt an industry that hasn't being tapped with any electronic payment technology.  I’m still observing how the industry is transforming almost a year down the line.

BebaPay card

Why the transportation industry?

The public transport industry in Kenya offers four characteristics that make it a good testing ground for new payments systems.

It is a cash-only industry
No other company is offering alternative electronic payments in this industry. All transactions are in cash other than the payments being made via Bebapay. 

There are at least two distinct group of customers
Commuters and the public vehicles owners form two distinct groups of customers with different needs. 

There are benefits for Google in coordinating the commuters and the public transport investors
NFC technology will enable Google to capture a trail of valuable data that can be used to identify customers' interests and needs.

Google is making each group better by coordinating their demands
Bebapay improves transactions for both the transport providers and the commuters. Commuters will be able to budget and manage their travel expenses and bus operators will ease the process of ticketing.

Google will become a tour de force in electronic payments in Kenya if they figure out how to scale BebaPay in the transport industry. Google has a chance to put NFC-enabled cards in the hands of millions of Kenyans. This will in turn make it easier for Google to sell Bebapay technology to retailers and other types of businesses in Kenya.

Soon enough merchants will be able to use the BebaPay application on their smartphones to accept payments from customers who have Bebapay application on their smartphones. Google will layer in analytics over this data stream to reward customers for their loyalty or spending patterns, or to offer coupons by brands that customers most desire when and where they want.

Google is already developing a mobile strategy today, well in advance of the time when it becomes common for someone to pay at the point of sale with a smartphone in Africa. But first, Google has to figure out how to scale the service and how to tackle the challenges of the retail environment.The transport industry gives Google the best chance to learn.