Cashless fare firms must get CBK nod before July roll out
What you need to know:
- Transport CS Michael Kamau made amendments to the National Transport and Safety Authority Regulations 2014 requiring prospective operators to seek regulatory approval from Central Bank
- The cash light fare payment system — which is already being used by some operators — seeks to enable commuters to pay their fare automatically by tapping a prepaid card on electronic gadgets
Companies seeking to offer cashless fare payment will need Central Bank’s approval as way of protecting commuters’ deposits, ahead of the July 1 roll-out.
This came after Transport and Infrastructure Cabinet Secretary Michael Kamau made amendments to the National Transport and Safety Authority Regulations 2014 requiring prospective operators to seek regulatory approval from Central Bank.
“A person desirous of providing the new fare system service shall obtain a letter of no objection from the Central Bank,” the Cabinet Secretary said through a special Gazette notice published last Friday.
The move is aimed at protecting commuters’ money that shall be held in the cards as deposit at any given time. The new rule could, however, complicate the switchover expected within the next seven days.
Mr Kamau also replaced the phrase “cashless fare system” with “cash light fare system” — a more advanced financial jargon meaning transactions that do not involve hard currency.
The amendments are the latest changes by the Transport ministry as the country gears up for an advanced fare payment mode in the public transport sector.
The cash light fare payment system — which is already being used by some operators — seeks to enable commuters to pay their fare automatically by tapping a prepaid card on electronic gadgets.
There has, however, been concern over integration of the cards from various providers to protect commuters from investing in more than one debit card. National Transport and Safety Authority director general Francis Meja, without giving timelines, insisted earlier in the month that regulations on debit cards integration will be released.
Several players, including banks and payment processing firms, have already partnered with bus companies to roll out debit cards to be used by commuters.
KCB, Equity Bank and Family Bank are the leaders on this in the banking industry, while Safaricom and Google are the main technology firms.
Matatu operators have also launched a system — the 1963 app — in a bid to benefit from the new rules.
