Safaricom pilots payment card to quicken transactions

A man walks past a Lipa na M-PESA counter at Uchumi Langata Hyper. PHOTO | FILE 

By OKUTTAH MARK, mokuttah@ke.nationmedia.com

In Summary

• Safaricom CEO Bob Collymore said the card under pilot meets all current banking security standards and has received necessary approvals from regulators.
• By March 2016, over Sh20 billion in payments had been made on the Lipa Na M-pesa platform, with more than 44,000 merchants accepting the service, an increase of 74 per cent from the previous year.

Safaricom is testing a payment card that will be linked to customers’ M-Pesa accounts as it eyes a slice of transaction commissions from the multi-billion shilling electronic cash industry.

The telecommunications company today announced that it is piloting the card among its staff to complement its Lipa na M-pesa service.

Its launch is expected “in the coming months.”

Plans are also underway to extend the pilot to university students, allowing users to make payments at select merchants.

The M-Pesa debit cards and point of sale (POS) terminals will enable customers to pay for services much faster through the use of Near Field Communication NFC tap-and-go technology-- a short range, high frequency wireless communication technology that enables the exchange of data between devices over about a 10 cm distance.

Safaricom CEO Bob Collymore said the card under pilot meets all current banking security standards and has received necessary approvals from regulators.

“As the M-Pesa ecosystem continues to expand, we continue to test the boundaries of the service to identify how we can continue to extend the gains of the platform to an increasing number of customers and businesses,” said Mr Collymore in a statement. 

This is the third stab the leading mobile provider is making on the card payments business after launching the My 1963 cashless fare payment card in November 2014 and a prepaid Visa card in partnership with I&M Bank in 2011.

To walk alone

Unlike previous attempts where it enlisted partners, this time the company has decided to walk alone.

The telco did not disclose whether there will be any fees chargeable on its NFC based card.

Safaricom customers currently pay varied fees for using the Lipa na M-Pesa service.

Those using the platform to buy fuel for example pay a 0.5 per cent commission on the value of every payment made.

By March 2016, over Sh20 billion in payments had been made on the Lipa Na M-Pesa platform, with more than 44,000 merchants accepting the service, an increase of 74 per cent from the previous year.

The launch of the M-Pesa linked payment card is likely yet again to put Safaricom on a head-to-head competition with financial institutions and comes on the backdrop of an announcement by commercial banks that they are setting up a mobile money transfer platform that will rival Safaricom’s M-Pesa.