More Nairobi Routes Adopt Cashless Payment Despite Resistance By Matatu Operators

Commuters plying Juja, Kangundo and Malaa routes will now pay their fares through Mpesa following a partnership between Safaricom and Forward Travelers matatu Sacco. The cashless payment service has been rolled out in 70 matatus, with plans to grow the number to 400 underway.   

The service meant to be rolled out on the Kayole- CBD route is powered by Simple Fare, a mobile and financial integration technology developed by Netcen Interactives. Simple Fare enables a commuter to pay fare through Lipa Na M-PESA with the payment immediately reflecting to the bus crew’s phones.

Simple Fare then provides matatu owners with a daily report on fares collected and enables withdrawal of funds to their M-PESA accounts. The service works across all phones and is equally available on an online portal.

The signing up of Forward Travelers Sacco brings to over 400 the number of public service vehicles that now accept payment of fares through M-PESA. The system is already in use in more than 300 City Star Shuttle vehicles in Nairobi.

Contactless Payment Resistance

In addition to supporting the fight against the pandemic, this platform facilitates seamless interactions across the ecosystem. It greatly boosts the matatu owners’ efforts of tracking their investments, while the SACCO can monitor their members’ activities. Such is the value that can be unlocked by embracing technological advancements. 70 per cent of Kenyans use matatus for their daily errands whereas 90 per cent of the population subscribe to the Mpesa services.

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Use of contactless payment in matatus has slowly been absorbed by conductors over time. The mode of payment is frowned upon by operators since the main beneficiaries are saccos and vehicle owners. This is because buses and routes are privately owned by several operators who ‘lease’ to drivers who must meet daily financial targets as well as their own daily income.  Since fares within the city differ at different times; rains, rush hours, demand and supply, matatu operators detest cashless payment since transactions are transparent and visible in real time.

Also, in a bid to ensure transparency, a group of informal workers usually stationed at pick up points are t denied their daily earnings often offered as tokens by conductors. This among other hurdles faced by the cashless service have contributed to the slow growth of the service in Kenya’s public transport.

With the Corona times, many Kenyans and vendors are however warming up to payment of services and goods through mobile money to minimize spread of the virus. Many companies in the business of telecommunications services are therefore banking on this situation to enroll cashless payments.

“M-PESA is increasingly becoming a preferred way to pay and collect fare for commuters and matatus. It has therefore become necessary to partner with the matatu sector to provide them with solutions that make it easy to collect and reconcile payments empowering them to efficiently run their businesses,” said Peter Ndegwa, CEO, Safaricom.  

Gathoni Kuria

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