In cashless payment system, matatu owners found a high potential market. But the cashless switchover has proceeded at a snail’s pace, so it seems, with government’s initial deadline of July 1st being extended by six months to December 1st 2014. Even with the second deadline, adoption has been minimal and the government has gone slow on implementation.
But five Public Service Vehicle saccos, with 250 vehicles plying Nairobi’s Jogoo Road, are now using Fibre Space Limited’s cashless system “MY1963” in what could be the beginning of the end for cash fare payments.
The owners claim that the government’s relaxation on the implementation of the cash light system puts them in a tight corner as they incur revenue losses that amount to over 30 per cent of their daily earnings.
In a bid to return order to the matatu industry and harmonise the PSV operations with an estimated turnover of over Sh180 billion, the government last year introduced a raft of measures, including moving all matatus into saccos and switching to cashless payments to increase transparency and reduce cases of corruption on the roads, which has been cited as the biggest culprit in the flouting of traffic rules and, ultimately, deaths on Kenyan roads.
“The matatu owners fully understand the need for the cash-lite fare system. With this partnership, our activators (card sellers) will be at bus terminals explaining the details to passengers… majority of whom have shied away from embracing them due to limited information,” says Mwakio Ngale, general manager of Fibre Space Limited.
The five saccos, with some of the largest fleets along the Jogoo Road route, are running a campaign that is now targeting over 100,000 passengers on one of the busiest roads in Nairobi, terming claims that saccos are not ready to embrace fare payment technology as untrue.
They include Ummoiner with 100 matatus, Cibet 40, Compliant 40, ROG –38, and Oma 32. About 40 youth selling the “MY1963” cards have been deployed to work during rush hours at selected bus terminals in Nairobi, including Ronald Ngala where the Ummoiner sacco buses are stationed.
The campaign targets Nairobi’s working class along Jogoo Road, students, estate traders, and mama mbogas, who are first to use the matatus from the estates to city markets especially Wakulima Market, where they buy produce to later sell to dwellers of estates along Jogoo Road.
The card sellers, known as activators, start by giving the passengers the cards at no cost, as they explain how the card works through the selfcare option.
Registration of the card is free with passengers needing only a national identification card, a valid phone number and date of birth information to create individual accounts. Users are then able to load money through M-Pesa at no additional cost, thanks to a partnership with Safaricom.
“This creates a smooth flow of the entire system. While we have offered the technical support to the matatu operators through training their members, making sure that the gadgets are available and back end systems are tested and working, it follows naturally that the next thing is to target the passengers with sensitisation,” says Mwakio.
The five saccos are using the exercise to test the waters on the adoption of the “MY1963” cards, which gives passengers loyalty points to get free fares and offers fare credit facilities. Besides creating over 2,000 jobs in card distribution, it has also seen both drivers and touts put onto formal salaries, with health benefits and credit facilities.
“The emerging trend where matatu owners are taking it upon themselves to accelerate adoption of the cards without waiting for government means that the switchover will be fast, smooth and definitely a new job creating platform,” says Mwakio.