Public service vehicles widely used by commuters in Kenya are expected to implement a cashless electronic payment system that will allow passengers pay electronically according to a government gazette.
The new electronic fare payment means Kenya public transport operations will be cashless, a move embraced by some but being opposed by others.
As per the Operation of Public Service Vehicles (PSVs) Regulations 2013, the public service vehicles comprising of Matatus, buses and taxis will have to use a cashless payment system unlike currently where passengers pay the fare using cash. The new electronic payment system in Kenya will require passengers to get pre-paid cards or use mobile money and that it shall be illegal to operate PSVs without the cashless payment system.
The cash-payment machine
Expected benefits from the Matatu cashless payment system in Kenya
According to the government, these measures will revolutionize the public transport industry and also ensure convenience, security, and accountability all at once in the sector. Transport Cabinet Secretary Kamau said the move is part of reforms being instituted in the transport sector to improve and entrench self-regulation by the operators. The system will help tackle corruption with traffic police who insist cash bribes if the PSVs flout traffic rules. It will also enable the Kenya Revenue Authority (KRA) to collect increased taxes from the industry due to increased transparency.
The onboard payment machine in bus
Simon Kimutai, Chairman at Matatu Owners Association added that matatu owners have for a while endured theft by PSV crews due to a lack of an accounting system since most PSVs do not issue a receipt to passengers indicating what they have paid.
The sector’s regulator has said that adoption of the cashless technology will be gradual so as not to inconvenience many Kenyans who are not accustomed to electronic payment.
Failure to comply with this regulation will see the operators or drivers risk being fined KES 50,000, imprisonment for one year, or both. The Authority may also cancel operator and drivers licenses for being non-compliant.
Companies offering cashless payment systems in Kenya
A number of firms have already rolled out the system which includes M-pesa where a passenger transaction is sent to Paybill with the business number and amount credited to the respective recipient’s account. Bebapay is a free top up card that a passenger taps on a device and the service is independent of telecoms, topping up is done through Equity Bank, Bebapay agents and Tellers.
At the moment, the Bebapay card from Equity bank will no longer be usable after one of the investors, the Google, pulled out of the deal. It is not yet clear on whether they will replace with another one but customers who had balances in their Bebapay cards have been advised to use utilize any remaining balance or get the balance transferred to a new Masters Card.
Others are Visa by Equity bank, and the passenger will only be required to tap their chip-based Visa card on a mobile phone or gadget to make payment. “MY 1963” card by Matatu Owners Association and Matatu Welfare Association will see a point of sale [POS] terminal installed in “MY 1963” compliant PSVs.
Abiria card by Kenya Commercial Bank, Master Card and Kenya Bus Services uses near field technology (NFC) and passenger taps the card onto a gadget. Pesapal pays using either mobile money, a credit card or an online wallet on Pesapal’s website.
It is hoped that the once implementation of the new cashless payment system will help streamline the Matatu industry, eliminate corruption in the PSV industry and ease collection of taxes from the public service vehicle operators.
Would you welcome such an innovation in your country especially those who use public transport, and why?