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Kenyan ‘matatu’ cashless fare plan faces criticism

Kenya , 14 Jan 2014

Kenyan ‘matatu’ cashless fare plan faces criticism

Digital payment methods for Kenyan public service vehicles, such as ‘matatus’, are set to kick-in this year, eliciting mixed responses from experts.

By July this year, Kenyan public service transport payment methods are planned to be fully cashless with electronic payment systems, according to a government gazette.

Public service vehicles such as ‘matatus’ -- minibus taxis that carry up to 24 people -- are expected to be affected by the regulation.

The likes of Equity Bank and Google have already established the likes of ‘BebaPay’, a cashless payment system for Kenyan matatus.

Meanwhile, Safaricom has reportedly signed up to 1,300 public transport vehicles including taxis through their “Lipa na MPesa” (Pay with MPesa) billing system.

One expert says the move towards cashless fare payments is good for the country as a whole but that it could face implementation problems, especially in rural areas where people may not be fully comfortable with digital payments.

“The country is 69% literate so the remaining 31% may find it difficult to operate in digitised money,” Odhiambo Ramogi, the managing consultant of Elim Consulting, told ITWeb Africa.

“Also technology has a way of attracting phobia and controversy. Thus implementers should be wary and make the payment mode simple, easy to use and acceptable by most if not all,” he told ITWeb Africa.

But gains made through this move could positively affect the economy, he added.

“Digitisation of fare payment in the transport industry will increase the velocity of money and by that increase the multiplier effect hence causing higher growth rates in the economy. Further, it will reduce leakages, staff fraud and inflation of fares due to flimsy reasons like rain,” Ramogi told ITWeb Africa.

However, other experts have been more scathing of the digital payment plans.

“At this point in time cashless payment will be great for some in Kenya, but unfortunately majority of Kenyans are still not ready for such drastic shift,” Kenyan technology expert Kennedy Kachwanya has written in a blog post.

“To start with, this should be left for market forces to determine the time and speed of adopting cashless mode of payment and not some sort of directive from the government,” he wrote.

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