A new payment processing solution called Paygate has been launched. Through the system, users in Kenya and Tanzania can now use M-Pesa for online shopping for goods and services.

According to Robin Philip, Marketing Director for PayGate, “There is very little e-commerce activity in many African countries. But that’s not because people don’t want to be able to buy online – they just haven’t been given the right payment options.”

Though other factors like lack of awareness and trust on virtual shopping affect the use of the same, Paygat believe that it is the lack of proper payment solutions which is affecting the adoption.

“Imagine a customer who wants to buy computer equipment or vouchers online,” says Philip. “If the merchant has enabled M-Pesa, the customer can choose that as a payment option when they go to check out. We give them the merchant’s M-Pesa account information, they make the payment using their phone, we process it and tell the merchant so they can complete the transaction.”

Tanzanian airline FastJet is among the first clients of Paygate. They now offer M-Pesa payments for online bookings.