Cashless Payment Systems In Kenya and Their Curse of Failure (Part 2)

This article has been continued from part one here.

Last week, we looked at some of the reasons why Cashless Payment Systems in Kenya are always failing. It was clear that the merchants and other stakeholders aren’t the only ones to blame for this failure, but the public plays a major role as well. This time round I will highlight the advantages of using Smart Cards to pay for goods and services, which could be much more that what I will list.

• Security – Yes, I know in part one, I mentioned that the cards could be unsecure. They expose you to possible identity theft and you risk losing money if the card is lost. But solid cash has the same disadvantages (not the identity theft). Once you lose your money, it is gone. With smart cards, you could simply inform your bank that your card is lost and they will block it, ensuring no transactions can be done with it. Plus, it is way safer to walk around with a card, compared to walking around with bulk money.

• Fast – Using a smart card is way faster than using Lipa Na MPESA. Ever been held up in a line at the counter because someone was trying to get the right paybill number? Or when there is a delay with MPESA and you have to wait before your payment is confirmed? Well, with smart cards, all you have to do is input your PIN and you’re done. Plus there is no risk of sending the money to the wrong merchant.

• Widely Accepted – Nowadays, almost every shop and outlet accepts cards as a payment option. All supermarkets accept them, all e-commerce websites prefer them, petrol stations reward you for using them and if we keep this up, even matatus will be forced to adopt them as well.

• Track Expenses – Do you think you spend too much on food? Or you’re not really sure where your money goes to? Well, if you use smart cards, you can easily track your expenses, since they will all be logged and sent to you as a monthly statement. This is the easiest way for you to know what you are spending a lot on and budget accordingly.

• Pre-Paid Cards – Did the mention of identity theft and the risk of losing your bank details scare you? Well, pre-paid cards solve just that. With a pre-paid card, there is no attachment to your bank account. All you have to do is simply load the card through MPESA and you’re good to go. This is actually my preferred way of payment. I can lock myself on a budget and it is also the safest way to buy goods online. These cards are widely available, most banks offer them for free and the most common one is the Nakumatt Global Smart card, which you can easily get at any Nakumatt outlet. Airtel even have the Airtel Money smart card which is directly attached to your Airtel money account, making it even easier to use it.

Using smart cards for payments is the way to go. We have to accept technology as the public, and if we want to hold the government, civil servants and matatus (public transport) responsible and avoid extortion (as well as fight corruption), cashless payments are the answer. So next time you want to hold up the line just so that you can pay via mpesa, think of how much faster it would be if you were using a card.