The Covid-19 pandemic has brought to the fore the need to integrate online payment models into business.
Over 13 years since M-Pesa was founded in Kenya, online payment have failed to gain the traction they were expected to. Maybe time has finally come for the founders’ dreams to be fully realised.
Dennis Ondeng, chief technology officer at Kopokopo, says the current Covid-19 pandemic might stir positive action in mobile payments as the world embraces the inevitable new normal.
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“We have seen Safaricom waiving fees on transactions of under Sh1,000, meaning that individuals and small businesses will manage to transact with ease. More people are now encouraged to take digital payment up,” he says.
Kopokopo, which was launched in 2012, partnered with Safaricom to bring Lipa na M-Pesa Buy Goods service to small and medium businesses throughout Kenya. It has 45,000 merchants in the country, with over 20,000 of them active.
The company partners with other aggregator and mobile money partners to help businesses leverage mobile payments.
Ondeng says that cashless transactions are faster, offer less leakage and, in this time of the coronavirus pandemic, help minimise risk of infection. And yet imposing this on people has been difficult, with the reception low even as campaigns are made to go the online way.
“It takes a lot of convincing to draw people in,” he says. “Misconceptions such as that PIN numbers are always insecure and could easily leak to fraudsters, and the lack of trust in e-commerce due to delivery of inauthentic goods by companies, have dented the growth of digital transactions.”
But the slow uptake notwithstanding, Kenya remains a regional leader in mobile money transfer, the acceptance of M-Pesa very high even as other countries grapple with sensitizing masses to accept online transactions.
According to Ondeng, a major disruption is needed to rope in some of the sectors that refuse to adopt online payments.
The matatu industry, for example, has not accepted the payment model, with different players in the industry having different incentives, some which are only favoured when payments are made in cash.
“A mind shift is very difficult. After M-Pesa started, very few companies believed in Nunua na M-Pesa. But we all use M-Pesa now.”
Kopokopo intends to have over 100,000 active merchants on its platform in two years, the invitation to make the society cashless impossible to ignore or resist.
Most African countries are, however, lagging behind in uptake of mobile transactions due to environments they offer not being enabling enough for investors.
“In environments where banks are very many, such as in South Africa, cementing this culture takes time. In other places, use of cards is very prominent.”