Google enters Kenya’s payment market bringing NFC along

Internet giant Google has made a quiet entry into Kenya’s electronic payment systems scene, signaling an impending battle for the sub-sector.

The company has introduced a transport payment card on Citi Hoppa buses plying Nairobi routes using near field communication (NFC) technology.

The Beba (which means to carry or to transport in Kiswahili) Card allows users to load money and make fare payments by tapping on a hand-held device in the buses. The Beba cards are free of charge and are available from Beba agents in certain locations. Google is using Top Image – the same company that markets M-PESA- to market the Beba cards. You need a Gmail account to activate and load your card with money from a Beba agent. Beba’s main selling proposition is to help people save money. The bus conductors and matatu (public service vehicles) touts have been known to hike up bus fares the moment it starts raining or when there is traffic. This is the problem that Beba is solving for commuters.

You can view all the transactions you have made from the beba website – that is, the date, amount and location where you loaded the beba card with money, the bus company you used, the amount you paid and the final destination where you alighted from the bus. You can easily claim for a refund in a case where a conductor over charges you because all the evidence is there in your account.

Google-Kenya’s communication manager, Ms Dorothy Ooko, said the project was still in its pilot phase and that an official launch with more partners was in the offing.

The Beba Card is the brainchild of Google-Ireland, a fact that Ms Ooko declined to comment on.

NFC is a wireless technology that allows devices to exchange information when in close proximity. It has most commonly been installed on smartphones, which are then used to make payments in retail outlets.

NFC devices can be used in contactless payment systems, similar to those currently used in credit cards and electronic ticket smartcards, and allow mobile payment to replace or supplement these systems. For example, Google has pioneered Google Wallet, which has been hailed as the West’s answer to mobile money allows consumers to store credit card and store loyalty card information in a virtual wallet and then use an NFC-enabled device at terminals that also accept MasterCard PayPass transactions. Germany, Austria and Latvia are already trialling NFC ticketing systems for public transport. And China is using it all over the country in public bus transport. In India NFC based transaction is being implemented in box offices for ticketing purposes. However, tech companies have been reluctant to launch the technology in Africa, citing low penetration of smartphones and other supporting infrastructure.

Electronic payments processor, Visa, has repeatedly declared its intentions to enter the Kenyan market with NFC technology while at the same time decrying technological and infrastructural development as hindrances to the plan.

Visa’s country director for East and Central Africa Victor Ndlovu said the company was ready to roll-out NFC in Kenya but was waiting for a financial partner to bridge the technological gaps in the retail and transport industries.

Google seems to have surpassed the infrastructure challenge by installing NFC technology on a card.  Technology commentators reckon that this is a strategic move on the company’s part.

As of December last year, 130,000 units of the Huawei IDEOS phone running on Google’s Android platform had been sold in Kenya.

According to last year’s data collected by technology research firm Taylor Nelson Sofres (TNS), 27 per cent of Kenyans intent to buy a smartphone while one out of five mobile phones in Africa is a smartphone.

Kenya’s electronic payment sector is dominated by mobile money. According to the Central Bank of Kenya, mobile cash transactions accounted for Ksh 1.2 trillion (USD 1.4 billion) in the year ending December 2011.

During the same period, the value of card transactions was estimated at about Sh521 billion (USD 611 million).

Sources: Daily Nation, think m-pesa, Diaspora Messenger, Bei Yangu