Public Service Vehicles (PSVs) without digital registered payment method will not be able to access insurance policy from Directline Assurance.
- The company said all public service vehicles to be insured by the company will be required to register with a cashless passenger manifest system.
- This will be put in operation through digital fare payment.
- The insurer’s directive is one of the many efforts to introduce cashless transaction in the matatu industry.
“Directline requires PSV policyholders to implement a digital passenger manifest for verification of claimants after the occurrence of accidents. This will enhance the process of injury claims management as well as adequately respond to the timelines being applied in the small claims court,” in a notice signed by the Chairman, Board of Directors.
“To this effect, from 1st February, 2024, the company will only issue policies to PSV vehicles that have a registered digital payment method from any of the payment gateways e.g Mpesa Till, available in the country.”
In 2013, regulations under the National Transport and Safety Authority (NTSA) required Public Service Vehicles to use cashless commuter payments. The system was meant to weed out corruption and bribes that are associated with cash payments.
Local fintech players were set to benefit from a one percent fee from the cashless payment system. Finance giants like Safaricom, Equity, and KCB eyed the prize, setting up infrastructures like prepaid cards to support the transition. Equity had BebaPay in partnership with Google, while Cooperative bank had M-Nauli.
The matatu owners, like the fintechs, embraced the idea. The entrepreneurs liked that the cashless system would seal holes that siphoned daily fare collections. Matatu Owners Association (MOA) chairman Simon Kimutai said that prepaid fare would bring order to the roads. Therefore, the Matatu Welfare Association launched a contactless tap-and-go card dubbed “1963” while Kenya Bus Service launched the Abiria Card.
Nonetheless, the system failed due to a lack of support from matatu operators. Media reports indicated that the cashless system denied matatu operators extra cash that they would otherwise not remit to the matatu owners.
NTSA Seeks to Introduce Cashless Payments in Matatus – Kenyan Wallstreet
