Mobile money giant M-Pesa is getting its own debit card to compete with banks

Money Transfer

M-Pesa customers will soon be able to use debit cards for quicker transactions.

Safaricom, parent of the M-Pesa mobile money platform, is eying a piece of the $13.5 billion in annual transactions in Kenya’s payment cards industry with a new debit card. In its pilot stage, the new card, which is largely expected to challenge commercial banks for card commissions, is linked to its Lipa na M-Pesa (pay with M-Pesa) service, which enables traders and individuals to settle bills at different points of sale across the country.

Operating on the Near Field Communication (NFC) technology ecosystem, Safaricom’s M-Pesa debit cards and point-of-sale (POS) terminals will allow consumers to pay for goods and services much quicker on the ‘tap-and-go’ basis. It is best suited for “high-volume, low-value transactions that are typically paid for with cash (pdf)”. A transaction occurs when an NFC-enabled mobile handset is placed near a POS terminal, typically over distances of up to 10 centimetres.

The current payment set-up using M-Pesa is much slower as it requires users to follow through several stages before a transaction is completed. In a typical set-up like the cashier’s till at a supermarket, a buyer is required to input the till number, the amount money due, the M-Pesa PIN and then wait for the transaction to be completed.

The success of its flagship mobile money transaction service, M-Pesa, has inspired the mobile phone firm to seek further success in the electronic payments industry, whose popularity has however lagged behind mobile money’s in the past five years.
Read the full story here:
Source: Quartz 19 July 2016