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DEVELOPING STORY: Kenya’s Safaricom to Disrupt Mobile Payments Afresh|Plans to Deploy NFC SIM Cards Countrywide

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Kenya’s Safaricom is reportedly working on NFC-enabled SIM cards which will see Kenyans use their phones to pay for just anything, from public transport, restaurants, shopping at supermarket tills, drug storers, cinema’s, concerts, fuel service stations and just about everything.

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Still undergoing the tendering process, the NFC SIM cards ware expected to be rolled out to its subscribers for mobile contactless payments and transactions making Safaricom the first mobile operator in the region to mass deploy SIM-based NFC for contactless transactions.

1528757_10153627744390084_1931178876_nFor a successful deployment, Safaricom is expected to build an NFC infrastructure countrywide, just like it did with its mobile money agents so as its subscribers can pay for services and buy goods anywhere in the country. This service will be a futuristic step ahead of its Lipa na M-PESA service whose adoption was growing steadily, countrywide. Safaricom will have to convince service providers to come onboard to accept mobile phone NFC swipes than the normal Lipa na M-PESA.

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With a great strategy, Safaricom might sign up banks, Matatu saccos and bus transport companies, retailers like Uchumi among others. TechMoran is yet to establish the technical partners and we cannot tell the specifics of the project which is still at a tendering process but just like Safaricom did with Kopo Kopo on Lipa na M-PESA, it will assign a partner like Gemalto to build a secure and scalable solution to so as retailers can run their own systems on the tiny SIM card so as they can load and update their own applications wherever they are. Retailers data on the SIM card can be buyers personal data and transactional history.

Just like M-PESA, the NFC wallet on Safaricom subscribers SIM cards will be as simple as it is to activate M-PESA and get going, ready to buy goods or pay for a cab or bus or air ticket. The NFC wallet on the SIM card  can be take up as much data to include and payment apps for shopping, transportation, bus or air tickeing, hotel booking, school fees payments, club memberships and loyalty programs.

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We do not have much details about the Safaricom NFC SIM card wallet and how it will work, technically but we presume it will meet EMVCo,  MasterCard and Visa requirements. A friend says most such SIM cards come with a 1.3 MB memory or above and can be found in the ordinary 2FF or micro-SIM to and nano-SIM types and run on Java and apart from NFC payment services, they support ticketing applications and discount loyalty programs.

Safaricom is not being insane.

Various mobile operators have launched these NFC wallets on their SIM cards before, as they make more sense than NFC tags.

As early as 2011, Korean mobile network operator SK Telecom announced an NFC-enabled USIM card that turns basic mobile phones into NFC devices as long as the user replaces the dumb SIM card with the new NFC USIMs. Complete with emulation and read/write functions and peer-to-peer support, the NFC  USIM’ cards had voice capabilities plus a 13.56MHz near field communication antenna and an NFC controller. The firm also released the API for developers to create diverse related services.

With such a SIM card, a phone can get product information in stores, receive mobile ads, discounts and coupons, power peer to peer real-time money transfers and also work as electronic business cards, check-in to hotels, unlock office doors and into their computers.

Still in 2011, China Mobile and China Unicom, which account for nearly 800 million connections throughout China, were among the GSMA’s 45 leading mobile operators embracing SIM-based Near Field Communications (NFC) solutions and services. GSMA said that those NFC handset and SIMs would enable the development and global deployment of secure, interoperable and ubiquitous SIM-based mobile NFC services.

India’s Bharti Airtel, Etisalat, Libya’s Mobily, Orange, Verizon, VimpelCom and Vodafone Group were also among the SIM-based NFC adopters.

But you can say most of these operators are in the first world and are not thinking mobile money.

However, a report by ABI Research indicates that 85 per cent of all new point of sale terminals shipped in 2016 will be NFC-enabled.  Another forecast by  Strategy Analytics indicates that  nearly 1.5 billion SIM-based NFC handsets will have been sold worldwide between 2010 and 2016, supporting transactions of more than $50 billion globally over the same period.

There are more arguments on why (smart)phones are a perfect carrier for NFC technologies. They can be used to read NFC tags on other objects, like discount codes you have to scan to redeem, or the target, holding your credit card information until sent the proper signal by a point-of-sale system in your favorite store. The small space in which NFC operates makes the technology ideal for interactions with people and personal technology. It’s also means that scans cannot be done without the user’s knowledge, so long as the device stays by them.

And we are not just talking about Google Offers and Google Wallet, just close by in Dubai, Etisalat and Du launched special NFC-enabled SIM cards for public transport payments though a range of smartphones years ago.

Closer home, iKaaz, a Sqaure-like startup is piloting its app, NFC tags and card readers in Nigeria to power cashless NFC payments, but being a tag and a card reader, we have little hope the Indian firm will successfully mass deploy the product and be in the Nigerian market for a longer time.

 Safaricom’s killer NFC SIM cards, if they come, might cost a fortune but will be a plus better than Lipa na M-PESA as there will be no waiting on queues due to M-PESA delays or in case of cash where one has to wait for change, no worries of fake currency by everyone and no more cash.

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Sam Wakoba
Sam Wakoba
Taking you on tour through Africa's tech and business ecosystem, one story at a time since 2010! Based out of Nairobi, Kenya, Sam is the founder and managing director of Moran Media, which runs, various other digital platforms and a startup incubation hub for Kenya's youthful entrepreneurs. Drop me a mail at [email protected]

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