Contactless payments come to Nairobi’s matatu bus networks

It is hoped that a contactless payments system on Nairobi's buses may help to ease congestion in the city.

O-CITY, the automated fare collection provider by BPC, has announced an initiative to drive contactless payments across bus services in Nairobi, Kenya.

The pilot, designed to reduce the use of cash in response to the COVID-19 pandemic, was launched in partnership with transport savings and credit specialists, NikoDigi, and Kenyan payments firm, Tracom, to accelerate the deployment of cashless fare collection.

Used by 70 per cent of the population in Kenya, matatu buses are a dominant transport mode across the country in which passengers traditionally pay in cash. The automated fare collection platform utilises the M-Pesa mobile wallet, which is used by 90 per cent of the population in Kenya.

Passengers enter a code on their phone and a debit is made on their wallet, which can be instantly seen by drivers to grant access to the bus. O-CITY says the platform removes unnecessary tickets and cash payments, instead offering an accessible payment solution that consumers already use, via a device already in their hand.

The company says its platform is also built to make fare collection more transparent between the bus owners and drivers. Buses and routes are privately owned by several operators who ‘lease’ to drivers who must meet daily financial fare targets, before generating their own earnings. Fare pricing differs depending on the route and a range of factors, so digitising the transactions enables visibility and reliability of fare data. With heavily congested routes in Nairobi, digitising fare collection also serves to remove the friction of exchanging money and time taken for drivers to pick up passengers.  

Patrick Karera, MD at Nikodigi, drew on his company’s experience to create the platform: “Having provided savings and credit management solutions for both the Matatu and Boda Boda (motorbike taxi) sectors, Nikodigi understands the needs of vehicle owners and drivers.

“Together with our partners, we have designed a product that automates fare collection without taking control away from the drivers and conductors or radically changing how they operate. The platform has been embraced by passengers because of its ease of use, but also because it eliminates cash transactions during the COVID-19 pandemic.”

Tokhir Abdukadyrov, Senior Vice-President of smart city and transport solutions at BPC, revealed how quickly things are changing in Kenya: “A mobile money revolution has been happening in Kenya with the ubiquity and success of M-Pesa.

“The move away from cash to contactless public transport is an important part of this movement. At O-CITY, we know that innovation does not always require new technologies, but instead new ways of performing a task. By connecting our O-CITY platform to mobile wallet M-Pesa, we’re able to build a simple contactless fare solution that is familiar to the customer and likely to encourage adoption. Moreover, it enables us to scale fast to roll-out the service at a time when cashless payments have a newfound importance.”