The National Transport and Safety Authority (NTSA) plans to introduce a cashless payment system in public transport. The authority recently called for bids from tech companies to install mobile software for matatus nationwide.
Once approved, the digital fare collection system will require passengers to pay the fare using their phones, which will allow for contact tracing necessary during the pandemic. Paying fare via mobile money platforms will give the government access to the identity and contact information of passengers essential for contact tracing.
An NTSA notice is calling tech firms to submit their bids by June 16.
“The cashless system will also provide a platform for the development of an effective contact tracing application to support the government effort in addressing the coronavirus pandemic,” Business Daily quoted NTSA Director-General George Njao.
Not Our First Rodeo in Cashless Fare
This is not the first time the NTSA has tried to introduce cashless systems in public transport. In 2013, regulations under the 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. Standard reported that the cashless system denied matatu operators extra cash that they would otherwise not remit to the matatu owners.
The COVID19 pandemic has brought concerns that cash payments act as a conduit for the virus. Will the threats of a deadly virus outweigh the interests of “fair share” from matatu operators? Only time will tell.