The Central Bank of Kenya has approved Safaricom’s M-Pesa service to offer cashless fare payment. Through M-Pesa matatus will use Lipa and M-Pesa mobile payment system in order to issue physical receipts. According to the rules Regulations of the system commuters should be issued with receipts after using their prepaid cards.
Safaricom is betting on its subscriber base for a larger share of the cashless fare market.
The Central bank had previously approved Kenya Commercial Bank (KCB), Co-operative bank (Co-op) and Equity bank as service providers. The bank is looking to harvest more than Ksh2 billion through this service.
KCB partnered with Tap-to-Pay and MasterCardto bring the Abiria Card, Equity Bank on the other hand brought Beba Pay in partnership with Google all in the bid to facilitate the cashless fare service. Both cards should generate receipts after each transaction.
The cashless fare system is expected to curb erratic increases in fares and enable Kenya Revenue Authority collect taxes from the industry. Other firms seeking to offer the cashless fare payment will have to get approval from the Central Bank of Kenya before December 1st.
The bank is seeking a larger share of the cash transfer market and piece of the voice business using its own overlay thin SIM card technology that Safaricom is opposing. Regulators have allowed Equity to operate the thin SIM in a one year pilot.