Lessons Learned From Kenya’s Failing Transport E-payment System

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When the Kenyan government announced that they would be implementing a digital fare payment in Kenya, it sounded like a great idea. The implementation, however, was such a catastrophe that it forced the National Transport Safety Authority (NTSA) to push the implementation date indefinitely. How did it happen?

The chaos that is the public transport system in Nairobi, capital of Kenya, made sure the e-payment plan died at conception. Controlling the many matatus (privately owned minibuses) has been a headache for the government, let alone trying to implement a new method of collecting fares.

But this is not the first time Kenya has seen such payments being implemented. Google, in collaboration with Equity Bank, launched cashless payment in 2012. Although it was a pilot project, it made the splash any product would want to make.

But the project did not last long. What, then, can the government do to ensure that the system is fully adopted?

Tuk Tuk, a three-wheeled motorized vehicle used as a taxi in Kenya by Martin Alvarez Espinar)

Tuk Tuk, a three-wheeled motorized vehicle used as a taxi in Kenya by Martin Alvarez Espinar

Don’t Just Sell The Product

We all make this mistake. Most technologies are not products by themselves. They enable services. The transport e-payment implementation by the government seemed to be selling a product, not the service it will give.

Over five banks had their own cashless payment, and the transport companies had also partnered with some of the payment companies. Interoperability between the various card services became a concern that was never addressed. Everyone just wanted to sell the cards.

The chaos that erupted could have been prevented by intense public education of how the cashless system would help the commuters rather than concentrating on the product. Free trials and user demonstrations should be considered in the process of public education.

There will always be resistance against change, especially to a new system that only few have tested.  When users know the benefits of one system from the other, the transition might still be slow, but at least it will be guaranteed. Just look at how Kenyans adopted mobile money, and, more recently mobile banking.


Kenya road transport by Martin Alvarez Espinar

Kenya road transport by Martin Alvarez Espinar

Cash is Still King

The government wanted to replace cash in the transport system all at once, something that has hardly worked across the globe. In Kenya, people still prefer to trade with cash, especially in the transport business. This will definitely change with more companies offering payment through mobile money, deemed much safer than carrying cash around.

The government can first engage the transport operators to adopt a digital method of accounting for cash fares by providing sustainable electronic receipt machines. After all, the efficiency of collecting fares and its accounting can be simplified by an automated system. Bus companies can compel their operators to use the digital machines to ensure accountability.

Once this has been established, the commuters can then be introduced to the cashless payment cards. This will ensure a smooth transition from both ends.

Aerial view of Nairobi from the Kenyatta International Conference Centre by Jonathan Stonehouse

Aerial view of Nairobi from the Kenyatta International Conference Centre by Jonathan Stonehouse

Not All Doom and Gloom

Amidst the mess, however, there are success stories to be found. Nakuru, one of the fastest growing towns in Kenya, has spearheaded the adoption of the cashless system in a case that can be a model for the whole country.

“After identifying the yawning gap for a cashless fare system in the region, we met with Nakuru matatu SACCOs in December and enlightened them about the cashless fare system and the role it plays in improving their business. The uptake, however, began much later, but has since been far more rapid than in Nairobi,” said Mwakio Ngale, the General Manager of cashless payment enabler My1963.

Ngale added that even though the uptake of the cards falls below Nairobi due to population differences, users in Nakuru use the card more than their counterparts in the capital.

The door to adopt a cashless system is still not shut. More socialization for both bus owners and commuters will enable the adoption of the system. Just like mobile money, which was slowly adopted over time but is now a force to reckon with, the cashless system needs more time for it to take root.

All in all, technology adoption should be given a little more time. Advantages of the new system should be underlined and preached through mainstream media to familiarize commuters with the cashless cards. One-day ultimatums would not do in a country that might not have a big tech-savvy population, especially away from the urban areas.

Payments, even in Africa, is slowly gravitating towards digital avenues. If the cashless payment is done well, Kenya will be well on its way in converting more people to use cards to purchase services and goods.