Evidence that Kenya is a cash obese economy is overwhelming: notices in cafés instruct you to pay first before you place your order and also remind you that they don’t provide credit, matatu conductors place currency notes between their index and middle fingers, banks resemble war zones when armed policemen escort cash carrying vans to deposit before July 1991 Kenyan importers needed Central Bank of Kenya’s approval before they bought foreign exchange.
As Joshua Wanyama, Pamoja Media CEO, observed in this recent interview, e-commerce in Kenya is growing, but a lack a nationally acceptable and valid electronic payment system and a ubiquitous culture that shuns buying goods and services online are in the list of obstacles preventing e-commerce in Kenya from fully taking off.
Card issuers and mobile phone companies collaborate
However, firms are rolling out different solutions to reduce the gulf between payments and e-commerce. In February this year, Safaricom launched the M-Pesa prepay safari card which allows its users to transact business online. In September Airtel and MasterCard launched payonline, a platform that enables the former’s subscribers to buy and pay for goods and services online using the latter’s cards. And down South, MTN launched payd, a system that facilitates South Africans to pay for goods and services online using a pin-based debit card.
These efforts are commendable, but insufficient if they are not complemented by measures to persuade Kenyan online shoppers to consider shopping and paying for goods using these cards. This festive season is a great opportunity about to vanish for Kenyan businesses to do that. They are offering an abundance of Christmas offers and even advertising them on their websites, but there’s neither information nor incentives to encourage customers to shop and pay for these offers online.
Champagne launches, flat follow ups
On December 16 2011, Safaricom concluded a nationwide tour to promote its products/services. These events attracted crowds similar to those who attend political rallies. They were not only entertained by comedians and musicians, they also won freebies such as tee shirts, hats and umbrellas. Why can’t Safaricom conduct a similar initiative to persuade (and reward) its subscribers with internet connection in their homes to use its safari card? Why hasn’t Airtel Kenya added information regarding its payonline
solution to its website? Both mobile phone service providers account for approximately 80% of Kenya’s 25 million subscribers. Imagine the effect their efforts to convince a substantial number of these subscribers to sign up to their respective offerings would have on online transactions in Kenya. One result is that the number of cards (Visa) will increase from the current 2 million. In addition, none of these companies have displayed the energy to update the public on the successes and challenges of these initiatives, compared with the enthusiasm they exhibit when they regularly update us on the progress of their other promotions, particularly those that have to do with winning cash.
Online transactions in Kenya will run on steroids once card issuers, mobile phone service providers and e-commerce sites actively woo, retain and reward potential card holders.