A customer pays for goods at a shop in Nairobi through her mobile phone.
A study shows smartphones will boost adoption of cashless financial
system in Kenya. FILE
By JAMES KARIUKI
In Summary
- Study shows that Kenya is ripe for virtual cashless system as subscribers shift to smartphones.
Kenya’s unique cashless system involving use of
mobile phones to settle payments for utilities and buy goods has created
a fertile ground for launch of an online based financial system.
United Kingdom-based firm, Research and Markets
said that mass adoption of cashless services by Kenyans could be taken
to new heights with use of wi-fi enabled phones that support online
based transactions.
Wireless Internet ‘hotspot’ service offered free
of charge by businesses to provide wi-fi to their customers, said the
just released report, would enable buyers to use their phones to settle
payments without use of the traditional banking channels.
“Increased global penetration of smartphones use
compounded with the widespread use of NFC (near field communication)
technology in the form of embedded tags is driving the mobile wallet
market,” read part of the report.
Last year, Kenyans transacted Sh1.7 trillion on
their mobile phones, a 23.7 per cent increase from Sh1.4 trillion in
2012, according to the Central Bank of Kenya.
The report further said that embracing the
cashless system provided a key driver in faster adoption of online based
transactions.
“Smartphones and associated applications are the
fundamental requirement for mobile wallet technology that enables
payment without the intervention of traditional banking channels,” it
noted.
The company said that Kenya enjoyed a favourable
regulatory regime that was driving adoption of mobile wallet technology
which had seen telcos expand access to financial services in far flung
areas without conventional banking services.
“Initiatives from governments to encourage the use
of mobile wallet is gaining momentum in emerging markets such as Kenya
and the Philippines due to the larger gap between bank and non-bank
organisations,” read the report.
“Financial inclusion is the crucial factor to
reduce this gap which can be accomplished by agreements between
governments, telecom companies and financial organisations.”
The report comes hardly a month after the Global
Mobile Companies Association issued its annual report showing the demand
for smartphones among Kenyans was on the rise — the third highest in
Africa after South Africa and Nigeria.
“Mobile wallet facility can be integrated with the
authentication programs to serve the dual purpose of authentication and
mobile payments,” the report added.
Several banks have also introduced online based
platforms enabling their customers to transact banking business through
their mobile phones.
kamaukariuki@gmail.com
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