Commuters using Citi Hoppa buses might have noticed the recent adoption of Beba cards in the payment of bus fare.
To use them, a commuter taps the card on the reader to initiate the transaction. The Beba card is a pre-paid debit card that is near field communication (NFC) technology-enabled and currently used for the payment of bus fare.
It is one of Google’s NFC-based products. If the trend picks up well, the payment method will catch up with future purchases in places like supermarkets and other retail joints. However, does near field communication technology stand a chance in Kenya?
Looking closely at the terms of service of the card, one will realise that Google is approaching the technology with caution, especially considering the unpredictable African market.
Rather than move straight to deploying NFC-based payments with mobile gadgets, the company is giving it a litmus test using the prepaid Beba card.
Near field communication is a broad technology with several applications. One of its uses is in the latest trends in global mobile payments.
In such a case, the technology turns smartphones into gadgets that initiate mobile payments and other financial transactions by a simple wave of the phone in front of a detector.
The impetus behind NFC has so far received the nod from device manufacturers and ICT industry players. Google, Microsoft, Apple, and Nokia are integrating NFC in their smart devices and phones.
Depending on market demands and consumer tastes, NFC-based payment methods vary. Notably, from the mobile perspective, gadgets embedded with NFC technology are slowly gaining acceptance in the market.
When near field communication is embedded in a gadget, this is how it works from a simplified view: Technically, in this case, the phone is equipped with an NFC microSD card in its hardware and radio-wave transmitter.
When activated by a software application, the device transmits information via radio waves, which are received by sensors on an NFC reader module.
The phone becomes a contactless “credit card” able to initiate a payment transaction. Depending on the end-user needs, a number of mobile money transactions can be initiated with a simple waving of the phone in front of the NFC receiver module or reader.
In Western countries, Google’s mobile wallet is a notable NFC technology-based product. Such modes of payment are being promoted as a number of mobile gadgets get off the manufacturers’ production lines with the NFC chip embedded in the hardware of the phone.
As the NFC technology gathers momentum in the West, there are challenges of jump-starting it in African markets and this has kept industry players out of the scene. Despite the challenges, Google seems to be giving the new NFC technology a try on the Kenyan market.
NFC vs SIM card payments
From the technological front, the current mobile payment technologies on the Kenyan market utilise the USSD (unstructured supplementary service data), which is readily available on the software platforms of all GSM phones.
The NFC payment technology is not SIM card dependant, like the mobile payments available on the market. NFC suits deployments featuring a mobile gadget or by use of cards and a reader like the Beba card.
This implies that the platform puts banks, merchants, handset owners, and mobile operators into a common ecosystem. One fact that is clear is that NFC has so far not been tailored to suit users in the developing world.
This is among the challenges it faces in deployment and adoption. NFC technology requires hardware considerations for associated mobile devices and also the installation of sensor terminal points at the points of sale.
While the NFC-based mode of payment requires a broad ecosystem to run, SIM card-based payments have the simplicity of involving only the carrier or operator and a few merchants. Given that NFC is a new technology being fronted by tech giants like Google, the up-take is still slow.
In fact, in a place like Kenya where the SIM card-based mobile payments is the norm, the uptake of NFC for mobile payments will take even longer. This is a point that Google might have realised from its earlier attempts to popularise the mobile digital wallet product as a means of future payments.
Google’s use of the NFC technology for the Beba bus ticketing in the Kenyan market is a reflection of how the technology is being deployed in a number of cities around the globe.
China, Japan, Germany, and parts of the US are using NFC-based payments for both public transport and retail payments.
The author is an ICT analyst and telecommunications engineer