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Thursday, November 17, 2016

MPESA CARD TO TAKE ON VISA IF TRIAL SUCCEEDS

Listed-telco Safaricom has confirmed it will take on Payment processors and Banks with its MPESA card if pilot testing gives positive results.

It has put its MPESA card on trial in the market with college students and the company's staff serving as the test groups.

If successful, the company plans to launch the card in the market to take on the market dominant Visa Card.

Safaricom is testing a Tap and Go card which users only need to tap onto its own Point of Sale card readers.

This is likely to build on the success of its Lipa na MPESA (Pay via MPESA) merchant service which grew by 73 per cent in the first half of the current financial year as compared to the same period last year.

However, for some points of sale such as at the Supermarket, the service tends to be tedious and delays queues perhaps calling for the much faster Tap and Go Card.

American payments processor, Visa Inc has seen its Visa Card grow rapidly in the Kenyan market the last few years.

Leading the charge have been Gas Stations where customers prefer to pay using cards. Supermarkets, Restaurants, Pubs and other outlets especially in malls have also embraced the card payment system as it is both efficient and cuts down on risks.

The Customer to Business transaction segment is among the fastest growing for MPESA. Lipa na MPESA alone grew 74%.

Overall, MPESA generated Sh26bn in revenues from 17.6m active customers in the six months to September 30, 2016.

By moving into this space, Safaricom seems set to take advantage of the failure by the Banking Industry to implement a seamless inter bank switch to bypass MPESA and other Telcos fees as initially envisaged when transferring money.

That plan was dented in large part by the two big players in the industry; Equity Bank and KCB.

Equity in particular, with its multiple partnerships with card vendors like MasterCard, Visa, American Express and so on was implacably opposed to the inter bank switch having Merchant Banking.

Until the issue of dropping Merchant Banking was dropped, Equity would not sign on, its CEO James Mwangi said,

Merchant banking would have meant that Kenyans could buy goods and services and the settlements take place within the banking system without involving Visa or Mastercard or even Lipa Na MPESA.



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