NAIROBI, Kenya, Jan 20 – I&M Bank announced on Wednesday that it had acquired an e-commerce Acquiring License from Visa International making it possible for the bank to launch e- payment services.
This makes it the first bank in Kenya to get the license making it possible for customers to purchase goods and services online.
Known as Merchant e-payment service, traders and businesses both locally and internationally will be able to accept online payments through credit and debit cards on their websites.
Speaking during the unveiling of the product, I&M Bank Product Development Manager Suprio Sengupta said the introduction of the service had been made possible by increased Internet usage in Kenya coupled with the rolling out of a supportive Internet infrastructure.
“There is an increasing usage of plastic cards as of the third quarter of 2009. We have 2.2 million visa debit cardholders and 111,000 credit card holders,” Mr Sengupta said.
He said the new service would address the changing payments landscape in Kenya as more and more customer expectations on service delivery continue to rise. The introduction of e-commerce services is made possible with the recent enactment of the Kenya Communications Amendment Act.
In a past interview with Capital Business, Kenya ICT Federation Director Kevit Desai said the Act legalises e-commerce, which has the capacity to boost economic activities and in turn contribute about three percent to the national Gross Domestic Product (GDP) growth in a few years.
Lack of local online payment facilities meant that many Kenyan businesses were in the past unable to reap the benefits of e-Commerce. I&M’s decision to introduce the service is likely to spur interest from other local banks to open up more online payment gateways.
Critical sectors likely to benefit from e-commerce include tourism, manufacturing, while utility businesses are likely to benefit the most from this latest development.
“The really big potential in a country like Kenya is for service providers. Imagine paying NHIF, holidays, electricity bills, and your flight ticket online and the cost and energy savings that come with that,” Mr Sengupta pointed out.
The Tamarind Group and Serena hotels are among the companies that are already using the service.
Tamarind Group Managing Director Gerson Misumi said the Merchant e-payment service had been a huge success for the business.
“It is so easy to use because the minute the transaction goes through we get the money transferred to account and a statement issued for our own reconciliation. I believe it is another vehicle for us to increase our business and easy for our customers to access our services,” Mr Misumi said.
Statistics show online retail purchases exceeded $100 billion (Sh75.9 trillion) in 2006 the world over.
This shows that there is a confluence of demand, technologies, customers, and changes in how people live, creating a thriving digital marketplace.