kenya:Posta set to issue payment cards

The Postal Corporation of Kenya (PCK) last week invited banks to submit tenders for settlement, acquiring and card issuance services.

While the settlement services will be provided for Posta’s existing agency banking business, card issuance is a new business venture for the State agency.

Post-Master General Daniel Kagwe said in an interview that the cards would be targeted primarily at the elderly and poor Kenyans in the government social protection programme.

“We must move to what we used to do, distribution of funds to the old, disadvantaged and vulnerable people. We’ve been thinking we can do it through a card system,” he said.

PCK will be going after a line of business that it lost to the Kenya Commercial Bank last year. Beneficiaries of the social protection programme previously collected their funds from their local post offices.

However, the government last year signed a contract with KCB to disburse the funds through payment cards that are linked to the beneficiaries’ biometric data.

President Uhuru Kenyatta at the time said that the change was occasioned by a need to get rid of fraud in the cash-transfers system.

Mr Kagwe said that the Posta card will similarly be equipped with biometric verification. He however added that the payment card project was still in its preliminary stages.

These cash-transfer contracts are worth millions, if not billions, of shillings. KCB was expected to transfer Sh29 billion to 400,000 orphans, elderly, disabled and poor people in the year to March 2016.

The payment card would be part of Posta’s aggressive technological shift in its attempt to return to profitability.

The company has over the past one month been piloting a mobile money wallet among its employees. The launch of the mobile money platform, Mr Kagwe said, is also dependent on the recruitment of a new settlement bank. The Posta payment card may also be integrated to the mobile money system.

Earlier this year, it launched MPost, a service that allows customers to user their phone numbers as their postal addresses as opposed to opening traditional postal boxes. Mr Kagwe says 20,000 users have signed up to the platform.

Posta also began offering encrypted email service targeting companies that rely on email for official communication. The service is available through the corporation’s online portal at a cost of Sh250 per month for individuals and Sh500 per user for large corporates.