Google slips into Kenya e-payment market

Internet giant Google has made a quiet entry into Kenya’s electronic payment systems scene, signalling an impending battle for the sub-sector.

The company has introduced a transport payment card on Citi Hoppa buses plying Nairobi routes using near field communication (NFC) technology.

The Beba Card allows users to load money and make fare payments by tapping on a hand-held device in the buses.

Google-Kenya’s communication manager, Ms Dorothy Ooko, said the project was still in its pilot phase and that an official launch with more partners was in the offing.

“The project is on a pilot basis. We have many partners and that is all we can say for now,” she told Smart Company on the phone.

The Beba Card is the brainchild of Google-Ireland, a fact that Ms Ooko declined to comment on.

NFC is a wireless technology that allows devices to exchange information when in close proximity. It has most commonly been installed on smartphones, which are then used to make payments in retail outlets.

Google has pioneered the technology in the US through its Android app, Google Wallet, which has been hailed as the West’s answer to mobile money.

However, tech companies have been reluctant to launch the technology in Africa, citing low penetration of smartphones and other supporting infrastructure.

Electronic payments processor, Visa, has repeatedly declared its intentions to enter the Kenyan market with NFC technology while at the same time decrying technological and infrastructural development as hindrances to the plan.

Ready to roll-out

Speaking with Smart Company on the phone last week, Visa’s country director for East and Central Africa Victor Ndlovu said the company was ready to roll-out NFC in Kenya but was waiting for a financial partner to bridge the technological gaps in the retail and transport industries.

“We have been ready to bring NFC into the country for the past few months. However, we need a bank to acquire the needed equipment. Government agencies in the transport sector could also step in and create partnerships,” said Mr Ndlovu.

Google seems to have surpassed the infrastructure challenge by installing NFC technology on a card.  Technology commentators reckon that this is a strategic move on the company’s part.

“They are being very clever about this. By the time the Kenyan market is ready for NFC on smartphones, they will already have an edge,” said ICT consultant Thomas Makau.

As of December last year, 130,000 units of the Huawei IDEOS phone running on Google’s Android platform had been sold in Kenya.

According to last year’s data collected by technology research firm Taylor Nelson Sofres (TNS), 27 per cent of Kenyans intent to buy a smartphone while one out of five mobile phones in Africa is a smartphone.

Kenya’s electronic payment sector is dominated by mobile money. According to the Central Bank of Kenya, mobile cash transactions accounted for Sh1.2 trillion in the year ending December 2011.

During the same period, the value of card transactions was estimated at about Sh521 billion.