Visa sets sights on mass market in growth plan


Robust growth in the use of plastic money in transactions has sparked a race among e-payment firms for control of the Kenyan market.

Card transactions grew steadily to hit the Sh1 trillion mark at the end of 2012 according to the Central Bank of Kenya data.

Cashless transactions grew by 77.9 per cent in the first nine months of 2012. Card users bought goods and services worth Sh77.8 billion, compared to Sh43.7 billion the previous year, through point of sale (POS) terminals.

Visa, which set up a regional office in Nairobi last year, says the number of its cards grew from five million to six million in 2012 but transactions were flat at $6 billion (Sh522 billion) even as more people swiped. The value of cashless transactions grew by five per cent to Sh26 billion in the past year, a clear indicator that more Kenyans are using plastic money.

Business Daily talked with Visa’s country manager for sub-Saharan Africa Jabu Basopo on the state of the plastic money business in Kenya and scramble to control it.


It’s a year since you opened the Nairobi office. What has been the impact?

Other than growing our staff numbers from six to 20 people, the number of Visa branded cards grew from five million to six million. We have more banks in our network — giving our customers increased accessibility to our services.

The volumes were flat at $6 billion despite the growth in POS (Point-of-sale) compared to cash or ATM.

Can you break down the growth?

Consumer behaviour is changing and more are opting to use plastic money instead of cash.

Three years ago cash transactions controlled a huge fraction of the consumer purchases but the terrain is changing and the balance tilting in favour of plastic money.

A five per cent increase in change of behaviour is significant and important to us. We want to electronify cash. Of course you can’t eliminate cash levels to zero but we would like to see more transactions go electronic whether mobile or plastic.

What are you doing to grow your footprint in the market?

Growing the acceptance footprint in the Kenyan market is key. Not just have the footprint in big retailers like Nakumatt but make sure your tier two kind of merchants, which are lower than the big retailers, also have point-of-sale where people can use their cards.

We are working with the banks in expanding that infrastructure.

Another key part of that strategy is to expand our infrastructure outside bigger cities like Nairobi, Mombasa and Kisumu.

Our focus is to give people outside of these towns access through smaller merchants such as curio traders.

We are working on technology that can deliver such services at low cost for easy acceptance by the merchants. The whole objective is to ensure it is easy to use cards and access of the platforms is available to everyone.

What technology are you working on to help grow your footprint?

We are going mobile, it is one of the biggest discussions in the market since the advent of mobile money. Two years ago we bought Fundamo — a mobile money firm that gives us the leverage to provide appropriate products in the mobile space.

The platform affords us the ability to offer three different services — mobile banking platform for banks, and the Visa mobile managed services that allow banks to interface the mobile wallet with cards.

This is almost ready. We are also piloting a project in Rwanda called M-Visa. It is all about coming up with flexible products at a low cost whether the target is the client or merchant.

On the pilot project, when can we expect it in Kenya?

It is a good technology for small businesses. It is a small gadget that you fit on your mobile phone to facilitate the swiping. All that the consumer needs is a phone.

The end result is that it takes Visa away from the premium segment to the mass market. In Kenya, the advantage is that nearly everyone has a mobile offering small transaction businesses to use the service.

It means your roadside trade can now have a mobile point-of-sale machine.

In Kenya, we are using other channels such as fuel stations to increase our visibility. This is a segment we have been working on in the past two years but are also exploring utility bill payments. If you can swipe your card at Nakumatt why not to pay bills using your card? We are also focusing on helping parents to pay school fees.

We want to make cards acceptable as a means of payment in Kenyan schools. Other target areas are e-government, whether its disbursement of social benefits or collection of revenue.

How about online sales?

The volumes in the past were very low, we are starting to see growth. It is a category that is important in other markets, especially during holidays.

We are working with the Ministry of Tourism to help grow this segment, especially for domestic tourism. We are seeing more Kenyans paying for holidays using cards within Kenya.


By Wangui Maina, Business Daily Africa


Categories: News

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