Kenya leads the way in mobile money innovation. M-Pesa, a revolutionary mobile banking platform, is transforming financial inclusion and the daily transactions of millions of people. This spirit of embracing technology can be further extended to improve public transport through a nationwide cashless fare system. Here’s why Kenya should wholeheartedly take this approach.
Increased productivity and faster travel:
Traffic congestion is a major challenge in Kenyan cities. Cashless payment systems eliminate the time spent applying for specific changes or waiting for drivers to change. Passengers tap their card or phone, and payment is instantly processed, allowing for a smooth boarding and quick departure. This means shorter commutes per person and more productivity.
Improved transparency and security:
Money laundering involves human error and theft. The cashless system prevents these issues. Each fare is recorded electronically, ensuring that travel agents are paid accurately. This transparency discourages rent avoidance and corruption, resulting in fairer and more accountable policies.
To increase financial inclusion:
The widespread adoption of M-Pesa shows that Kenya has a robust mobile money infrastructure. Financial integration is further enhanced by integrating payment systems with existing mobile wallets such as M-Pesa. People without traditional bank accounts can still participate in the formal financial services by using their mobile phones on public transport.
Data-Driven Decision Making:
Fare charts provide valuable information about passenger traffic, routes, and peak travel times. This data can be used by transportation authorities and operators to optimize routes, allocate resources more efficiently and improve service delivery. Imagine being able to adjust bus schedules, reduce wait times, and create efficient travel plans based on real-time passenger data
Safety and Hygiene Benefits:
The COVID-19 pandemic has highlighted the need to reduce physical contact. Cashless payment systems reduce the need for exchange, encourage good hygiene practices, and reduce the spread of bacteria. In addition, eliminating transaction fees can deter petty theft and keep passengers and travel agents safe.
Empowerment of the informal transport sector:
Matatus, the ubiquitous minibuses and taxis that dominate Kenya’s transport industry, also benefit from the cashless fare system. The integration of mobile payment solutions such as Lipa and M-Pesa enables convenient fare collection on this informal transport system. It makes matatu operators more efficient, more transparent and a safer working environment.
Challenges and solutions:
While the benefits are appealing, there are challenges to consider. Not everyone has a smartphone or reliable internet access. Ensuring inclusion requires a multi-pronged approach. Car cards with stored value can be added to mobile wallets, to cater to those without a smartphone. In addition, government policies could focus on expanding Internet access in underserved areas.
Conclusion: The way forward
Kenya has already made significant strides in an economically challenged country. Adopting a statewide cashless housing policy is a logical next step. By working together, governments, carriers, mobile network providers and financial institutions can create simple and effective systems that benefit everyone. These changes will not only make travel faster and easier, but will also contribute to a transparent, safe and data-driven transport system for all Kenyans.
