The National Safety and Transport Authority (NTSA) has licensed 29 companies to offer cashless platforms for payment of fare in Public Service Vehicles (PSVs) The companies include Safaricom, NCBA, JamboPay, payment gateway firm-Cellulant, KCB and Little Cab’s parent, Craft Silicon.
The licensing comes after NTSA advertised a tender for the services in June 2020. The tech companies are expected to develop and install mobile software and web applications to facilitate payment of fares in the nearly 200, 000 matatus in the country.
The search for a cashless system was further intensified following the Covid-19 pandemic outbreak in the country. The digital fare collection system, which has set the stage for the ban of cash in the transport sector, is expected to have contact tracing capabilities.
Once installed, PSV users will be expected to pay their transport via mobile money platforms, giving the government access to their identities, phone numbers and personal information which are crucial for contact tracing.
The introduction of a cashless system follows a similar attempt by the government to launch a digital system in 2014. The system, which was launched in 2014, was strongly opposed by Matatu operators who felt that the government was trying to impose stringent taxation measures on their income.
At the time however, the government’s objective was to reign in on criminal cartels who had infiltrated the PSV sector. It also sought to track income in the country’s PSV sector which is said to gross at least Sh240 billion annually.
The system at the time was also expected to track payments in real time, curbing employee fraud.
At the time, Safaricom entered into a partnership with Mwakio Ngele, founder of My1963 commuter card.
Money from the cashless system was to be deposited into a bank account to also make it easier for matatu owners to access loans.
The Covid-19 pandemic presented a need for the government to provide a cash alternative in the transport sector as it sought to curb the spread of the virus.