Mobile system to drive cashless transactions

Imagine doing your shopping at a supermarket and when you get to the till, you are not required to pay cash or swipe a card, you simply wave your mobile phone near the till and your bill is settled. Sounds too futuristic?

What if, instead of paying a bus conductor in cash you just hold up your smart phone and he uses a scanning device to deduct your bus fare?

This is the world of Near Field Communication (NFC) and although it sounds novel, the technology is already present in Kenya and it is just a matter of time before it goes into mass adoption.

From payment for bus tickets, getting goods from automatic vending machines to simple data-sharing, NFC technology is widely used in some countries in the developing world.

The technology uses radio frequency identification (RFID) to transfer information over a short distance in a process similar to Bluetooth or WiFi technology.

Some of the latest smartphones come with NFC hardware installed, enabling users to transform their cell phones into virtual wallets and credit cards that can be used for everyday transactions.

Recently, several tech companies in Kenya have been exploring the use of the technology and are set to make consumers among the first on the continent to adopt NFC technology.

Google in partnership with Citi Hoppa bus services is currently testing NFC technology in selected routes in Nairobi in anticipation of a roll-out in other routes in the city.

The partnership has bus conductors provided with NFC- enabled smart-phones with which they use to collect money electronically from travellers.

The product dubbed Beba Beba is currently in its trial stages and Google says it will evaluate the success of the pilot study before making a public launch.

International mobile network operator Airtel Africa is said to be exploring NFC services in Kenya, Tanzania, Gabon and other nine African countries in early 2011.

Oberthur Technologies, a multi-national technology firm last year announced at the Mobile World Congress in Barcelona that it would be patnering with Airtel to bring the technology to Africa.

According to Kimani Waiganjo, a networks administrator at Internet company Bright Connections, NFC has the potential to be the next frontier in consumer technology in Kenya.

“Near Field Communication is dependent on the adoption and availability of NFC- compatible smart phones among consumers,” he says.

“The reason it is so widespread in more developed countries is that smart phone penetration in those countries is deeper and when retailers and service providers install NFC -scanning hardware, they are sure to have clients who will make use of them.”

Mr Waiganjo says the same applies in the country where smart phone penetration in the last two years has greatly increased and more Kenyans have access to the devices.

“Kenyan consumers today enjoy one of the most diverse selection of smart phone brands in Africa as evident by the recent launch of high end products like the Samsung Galaxy 3.”

In addition to this, NFC technology is appealing to consumers because of the convenience that come along with it.

“You can compare the convenience of NFC for use in business transaction to the convenience that mobile money transfer has brought to the Kenyan economy,” says Mr Waiganjo.

“Instead of carrying money physically, consumers can load their phones with a “virtual wallet” which you put into an NFC scanner at the retail store and the sum of your transaction is deducted.”

No physical third parties are involved and since the transaction happens when the two devices are within close proximity to each other and happens through radio frequencies, the consumer is assured of security.

An example of this is Google Wallet which enables users to keep personal financial details like credit card numbers and loyalty card information in a virtual wallet that are then used at NFC-enabled terminals.