Cashless fare drive runs into rough bump

The plan to drive public service transport payments to a cashless mode has run into a major bump after an umbrella matatu sacco disowned the government-led initiative supposed to take effect on July 1.

Nairobi Metropolitan PSVs Sacco Union said it had not been involved in the process despite being one of the players that will be hugely affected by the switch.

The sacco says there are four firms behind the undertaking, which it fears could be a scam in the making. It says that despite many banks offering services to the sector, only one will be involved in the system on a pilot basis.

“The National Transport Safety Authority (NTSA) should know that the four Nairobi based companies do not represent PSV saccos. We doubt whether they represent any PSV companies anywhere in Kenya. It is illegal to allow four individuals to make decisions for hundreds of matatu operators spread out across Kenya,” the union chairman, Mr Peter Kiige, said.

In a statement to the Nation, Mr Kiige called for further consultations among all saccos in the industry before the system comes into effect. And that it was desirable that all banks be allowed to participate in the multi-billion shillings deal.

“We bank with different banks who give us money to buy vehicles and allowing only one bank to benefit from such a venture would complicate the issue. Let us not impose a small bank on all of us from a process we were not involved in,” he said.

Early this month, Transport Principal Secretary Irungu Nyakera announced the planned launch saying it would be activated on saccos served by a single bank on a pilot phase, before being finally rolled out nationally.

The planned July 1 switch will see passengers tap cards on point of sale wireless gadget where the fares will be deducted and banked into individual accounts of respective matatus.

The procedure will also see tax automatically deducted and sent to the exchequer thereby providing a new revenue source for the government.

But Mr Kiige bitterly protested the move saying saccos ought to be given adequate time to liaise with their banks and co-operative officials, in order to perfect the inter-operability system they were earlier working on before activation.

Proof of inter-operability of the payment cards was a key licensing condition set by the Central Bank of Kenya, which argued that any paycard issued by any bank should be used to settle fares.

Matatu Owners Association Chairman Simon Mutai called for closer co-operation between operators and NTSA saying for the smooth transition from cash to cashless systems, matatu owners must be involved wholly through their associations.