VISA country manager Jabu Basopo told Capital FM Business that the solution will work for all retailers who have a mobile phone, while banks will provide the swipe terminal at a cost of Sh9,000.
“It’s targeted for the guy who is selling vegetables on the roadside,” he said, explaining the simplicity of the product.
“I go, for example, to Maasai Market and it is full of purchasing tourists. These tourists want to buy everything but they have limited cash so you can imagine if those guys (sellers) accepted a card,” Basopo enthused.
Based on research findings Basopo expressed confidence that every 10 percent rise in electronic payments will result in a one percent increase in Kenya’s annual revenue.
Basopo says the revenue will be bolstered through decreased tax evasion and the increased spending of tourists from the developed world who are more familiar with plastic money.
“If you look at the cash economy there are a lot of grey areas but using an electronic payment system you maximise the collection of revenue so the government is able to collect more revenue based on electronic payments versus cash economy.”
Customers stand to benefit as well, Basopo added, given the risk of carrying cash is eliminated. “It’s not just at the government level, it’s not just at the bank’s level but also direct to individuals.”
Basopo said VISA has eliminated the risk of identity theft through skimming by storing the user’s information not on the magnetic strip but on the chip of the VISA card, “there will be an initial cost to banks to switch to EMV (chip) but it’s cheaper in the long run as it limits fraud.”
EMV (stands for Europay, MasterCard and Visa) is a global security standard for chip card technology.
Basopo also assured VISA users that merchants will not charge them extra for using their cards, “We’ve heard reports of some in the hospitality industry charging their clients to use their VISA cards. This shouldn’t be the case and we are working with Kenyan regulators to remedy the situation.”
The amount paid using a debit or pre-paid VISA card should also be immediately deducted from your account to avoid inconveniences later, “some banks actually send you a text message the minute you complete a transaction.”