[Guest Post] Cashless ‘matatu’ good idea but system needs rethinking


Cashless ‘matatu’ good idea but system needs rethinking

When it comes to creativity in technology, Kenya does truly come up with innovative ideas. The government came up with the idea to legislate and force Public Service Vehicles (PSVs) to collect fares electronically. We will get to the real intention later. In the meantime, once the technology is put to large scale use, conductors will no longer have to walk around with pockets full of money.

PSV operators will no longer have to worry about rampant theft of their earnings. There won’t be that challenge of finding change, and in the all too familiar and rampant PSV hijacking, gangsters will no longer find it a palatable target for the day’s collections. Beyond that, the price stability in a volatile market is now nearly guaranteed, probably with peak and off-peak rates being an issue of the past and assuming that PSV staff cannot fiddle with the platform.

It’s sensible, as we can then avoid the silliness of prices being hiked the minute mother nature puts unleashes her dark grey clouds upon the earth. We have inspired a successful money transfer model and platform, and being that we are Kenyan, and love hustling, money is our business. We are the role model of the Peer-to-Peer (P2P) mobile money model. It has been revolutionary, and it has achieved its primary role. Other tasks, however, seem to be a challenge.

Mobile Money Model is limited

Our P2P mobile money platform was designed and built for that specific singular task. Moving money between two people. It was built during a volatile dark time in our history, and for its primary role, it has worked very well. In reality, it struggles in serving the Consumer-to-Business (C2B) and Business-to-Consumer (B2C) markets, where it is being touted as the perfect fit. As a micro-payment platform, it is not. It was never built for such use. By design, it is already crippled. It is becoming common to wait a fairly long time to post a transaction. Waiting up to 45 minutes during peak times is not unheard of. No surprises there, since it was not designed to handle that many transactions simultaneously, and it does not have the scaling ability for its proposed role.

Better alternatives exist

Micro-payment platforms using Near Field Communication (NFC) cards and devices, however, represents the kind of robust platform built for the PSV business. Suica, Oyster Card, Octopus, and many more are international NFC platforms used to post millions of transactions on a daily basis in some of the world’s busiest transport platforms, moving far more people in a far better organised environment than Nairobi. They also don’t fail as much. Why? It is because they were built from the ground up with that specific intention. They were not hived off another platform, adapted or modified. They were purposely built for this. Purpose is critical in an intelligent platform, as it helps determine future scaling decisions based on demand and cost.

Questionable intentions

Our government is clearly adamant about putting even more technology into consumers hands. That deserves applause. The reasons for them, however, may not be as saintly as might appear. This is a guaranteed source for tax revenues. For every payment made, the tax man takes their cut, daily for the rest of our lives. The government has never been able to fully extract revenue from PSVs, because, honestly, it has been guessing the actual revenues and the PSV operators have not been forthcoming about their income.

This new idea guarantees that the government knows the real numbers, and it guarantees that they earn their cut hands-free. Does this means that transport prices will go up? Very likely. Secondly, all transactions are tracked, meaning the government can at any time determine where you are, where you have been, and where you are going to, simply by you paying bus fare. So, if the government needs to find you, it would be as easy as asking the payment provider to hand over the data.

Finally, the government has to convince Kenyans that paying more than they are currently using an electronic model they don’t yet feel comfortable with is actually a good thing. And in a country where income is not increasing as fast as expenditure, it is a tough sell. It can only be enforced by legislation, hence the push. It is a brilliant plan, without a doubt, but for once, can the masterminds address all the potential pitfalls before switching to the new platform? Just this once, could we avoid making the same mistakes we made with projects like prepaid electricity?

The writer is the CEO of Able Wireless Company (www.ablehq.co.ke), a media streaming service provider. He can be emailed on (kahenya@ablehq.co.ke

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