E-commerce dealers turn to mobile phone

Kenyans’ resistance to use of plastic money has seen providers of cash-less payment systems leapfrog credit cards to use of mobile phone based e-commerce.

Companies that have e-payment platforms such as I&M Bank, JamboPay, PesaPal and I-pay say the uptake of cards for electronic commerce has been slow, even after the law was changed last year to introduce online transactions.

This has forced the players to integrate their systems to mobile phone operators’ platforms to tap more customers.

There are an estimated 13 million Kenyans with access to money transfer services compared to 2.2 million Visa debit card holders and 111,000 credit card holders as at end of 2009.

“E-payments in most countries, especially in the West, evolved from cash to cards to mobile but Kenya almost shot from cash to mobile in a decade,” said Danson Muchemi, business development director at JamboPay.

Agosta Liko, the chief executive of Pesapal, said the firm had to factor in the high use of mobile phones in Kenya while setting up their e-payment system.

“We have started from zero and are designing it as per market needs. This is unlike in other countries whose systems were designed as per Visa specifications.”

Faith Nyoike of I-pay said mobile payments have helped to localise the concept of e-payment, which has for a long time been viewed as a reserve for high income earners.

Credit cards

“People have always been scared of credit cards, the fact that they have confidence in mobile payments makes it easier to pull them to online payment and e-commerce.”

JamboPay, which deals with both mobile payments and card based payments, said the uptake and returns from mobile payments has been higher than card supported transactions.

Mr Muchemi said Visa credit and debit cards payments are popular for conference, events booking, and in the hotel and tourism industry.

A major limitation for mobile phone based transactions, however, is that they are not yet in use in international payments.

This is because most countries are still lagging behind on mobile payments.

Local commercial banks have been slow to adopt online payment services. I & M Bank is the only lender with a license from Visa International for facilitating online payments.