Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
ipay/Courtesy

Enterprise

Kenya’s cashless system still slow

Philip Nyamwaya, MD of iPAY during the launch the Affiliates Programme for Web Developers Community/File

NAIROBI, Kenya, Jun 21 – Kenya’s payment systems has evolved overtime however the cashless system is not picking as fast, yet it is predicted to raise up to 30 percent of the country’s revenue.

iPay Chief Executive Officer Philip Nyamwaya said the system is quite slow compared to other players in the market who seem to have picked up and are involving their customers in the same.

“There is an upward trend currently observed in the market, but it is not where we should be as a country when we compare it to other regulators such as the Central Bank of Kenya,” said iPay leader.

He further said the country will finally be forced to adopt a cashless system, going by global trends in more developed economies such as China, which incidentally happens to be one of Kenya’s top ‘influencers’ in such developments.

“Somewhere along the line, physical cash will cease to be king. When we look at a county such as China, with an economy of that size and the number of transactions that happen on a daily basis, with the overwhelming number being digital payments, then Kenya, with similar demographics and a much smaller population, definitely has what it takes to head in that direction and benefit from the efficiencies digital payments bring to an economy, such as ease and greater speed of liquidity transfer between peers”, he added.

The cashless has its pros and cons in which they will boost the country’s advancement in technology, infrastructure, and trade.

The new development will also help reduce informal transactions and help reduce criminal activities.

Already, the Central Bank of Kenya has issued new bank notes to the Kenyan market and said all 1000 denomination notes will cease to be legal tender from October 1st, 2019.

This is also a measure taken by the government to reduce criminal activities and fake cash transactions that has been the case in recent months.

Nyamwaya, however, notes that demonitaztion could be challenging to the less fortunate or those at the bottom of the economic pyramid due to the expected increase in inflation that is usually a spin-off of such efforts by regulators the world over, and which, if not handled correctly can lead to negative economic outcomes in this segment.

“These group of individuals are also unlikely to have the privilege of experiencing and getting acquainted with digital facilities denying them the opportunity of fully adopt and enjoy the benefits of using a cashless system,” he added.

Advertisement. Scroll to continue reading.

The Central Bank will also need to come up with rules and regulations for companies to follow the necessary needs for them to recognize the importance of adapting a cashless economy he said.

Kenya also needs to work on its security system to ensure there is no breach in it hence reduce doubts likely to emerge as a result of identity theft and cyber fraud.

The Kenya Revenue Authority will also be able to curb tax evaders given that it has continued missing its targets in every financial year.

Last year, the tax collector missed its revenue collection by Sh61 billion.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...