Safaricom is among a group of lenders and IT companies that have been licensed to offer cashless payments in Public Service Vehicles (PSVs), setting the stage for the ban of use of cash in public transport.
In a notice, National Safety and Transport Authority (NTSA) said the licensed 29 companies will offer a platform for cashless fare payment service.
This was in response to a June 16, 2020 tender where NTSA sought tech companies to install mobile software and web applications for the nearly 200,000 matatus in the country.
The digital fare collection system will also have the technical capability to contact trace passengers in the fight against the coronavirus disease.
Once the system is in place, all passengers will be required to pay their fares via mobile money platforms, giving the government access to their identities and personal contact information that is needed to combat the Covid-19 pandemic, which has disrupted lives worldwide.
Other top firms permitted to offer the cashless fare system are Craft Silicon (behind taxi-hailing App-Little), JamboPay, Cellullant (a pan-African payments gateway firm), KCB Bank Kenya, and CBA Bank now NCBA.
An earlier cashless fare payment platform fronted by the government, and which was launched in November 2014, flopped following strong opposition from matatu operators who felt that it was a ploy to monitor their daily earnings for taxation measures.
The digital payment system required passengers to get pre-paid cards or use mobile money for payment of fares in PSVs.
At the time, the stated interest of the government was to eliminate criminal cartels that had infiltrated the PSV industry and to provide the taxman with a platform to track incomes in a sector that grosses more than Sh420 billion annually.
The digital fare collection system was also expected to curb employee fraud by matatu crew because it would have allowed owners to track payments in real time.
The money collected was to be remitted in a bank account, making it easier for vehicle owners to access loans.
Technology firms and banks had come up with products to support the PSV e-ticketing system with their eyes on the one percent processing fee, currently estimated at Sh4 billion annually.
The firms included Safaricom, which declared a “partnership” interest in My 1963 commuter card with Mwakio Ngale, a Nairobi-based techie through his IT firm Fibre Spac.
Now, another pressing need for the cashless payment platform has emerged in the form of contact-tracing amid the Covid-19 pandemic.