kenya:PesaPrint rolls out cashless fare system for PSVs

MAY 05,2014.


The competition in the provision of cashless fare payment system in the public transport sector is set to go up a notch higher with the entry of PesaPrint Ltd, which is eyeing the multi-billion sector with an integrated system.

Unlike other firms that have already launched their cashless products, PesaPrint can use multiple cards including its own, dubbed Metro Card or from its rivals which are NFC- enabled such as Visa or Master Cards.

The interoperability of PesaPrint’s cashless system also enables it to accept mobile money payment services such as Safaricom’s  Lipa na M-Pesa service, Master Card’s PayPass and Visa’s PayWave. 

PesaPrint Ltd is targeting this market segment following the Government’s move to digitise the chaotic transport industry.

David Ruiyi, a co-founder of PesaPrint Ltd, says the cashless payment system provides other value additions  to public vehicle owners such as a route management which  provides real time information on where the matatu is, its  key pick up points and if it has veered off its designated route, among other services.

“We looked at the consumer first and decided to develop a system locally that accepts major cashless payment system so that they don’t have to invest in multiple cards,” Mr Ruiya told theBusiness Daily in an interview.

The payment system also comes with a portable receipt printer. Once the commuter has made his or her payment it triggers the printer which automatically produces  the receipt.

The receipts contain details of the vehicle route and registration numbers, the name of the supervisor and details of the card used to make the payment.

PesaPrint is also targeting taxis and commuter trains.

This service follows an announcement by the National Transport and Safety Authority (NTSA) that it is considering integrating cashless fare payment systems from different service providers in the public transport sector.

“We are ready to work with other cashless payment systems, however we are still waiting for the government to issue guidelines on how this will work,” added Mr Ruiyi.

The government has gazetted regulations that will outlaw use of cash for bus fare starting July.

The cashless fare payment system, among other things, is meant to curb erratic increases of fares based on weather patterns, traffic flow and other considerations and enable the Kenya Revenue Authority to effectively collect taxes from the industry.

The country’s multi-billion untaxed industry has more than 22,000 licensed PSV operators, according to the Traffic Licensing Board. Bus owners on the other hand will be able to track earnings online through a dashboard, thus making it easier to analyse their businesses.

Other firms that have rolled out the cashless fare payment systems   include Safaricom (Lipa na M-Pesa), Google in partnership with Equity (BebaPay), a Hong Kong firm— TapTopay— that has partnered with the Kenya Bus Service (KBS) to pilot the pre-paid plastic called Abiria Card.

They have introduced cashless payment methods ahead of a planned government ban on cash transactions on public transport from July.

Visa is also reported to be eying a piece of the Sh205 billion Kenya public transport industry with a cashless payment product that is yet to be introduced into the market.

These providers, however, have not signed up with all public vehicles in the city, a failure that NTSA says may force commuters to invest in multiple cards and cause inconvenience to the public.

NTSA chairman Lee Kinyanjui said in a previous  interview that the agency had formed a committee comprising the service providers and transport stakeholders to come up with an integrated cashless payment system.

“What we initially envisaged was to introduce a cashless payment system in the country but as providers started rolling out their products we realised that there is a need to have them integrated to save the commuters from investing in multiple cards,” Mr Kinyanjui said.

“The need for integrating this system is critical and that is the reason we have formed a task force to come up with a solution,” he added.

In the current form, a commuter who has invested in Google’s BebaPay and is travelling to a part of the city that is dominated by Kenya Bus Service (KBS) may be forced to buy both the BebaPay and the Abiria card— exclusively used in KBS buses.

BebaPay, launched in April last year, has so far signed up about 650 buses and matatus. Safaricom says it has assigned M-Pesa paybill numbers to about 2,500 matatu operators under the Lipa Na M-Pesa service.

Global payments processing firms Visa and MasterCard have also announced plans to roll out similar cards, highlighting the increased interest in digitising Kenya’s chaotic matatu industry.

These firms stand to rake in at least Sh2.05 billion annually in revenue by processing fare payments for PSV operators for a one per cent commission fee.