As per the Operation of Public Service Vehicles (PSVs) Regulations 2013, PSVs which include buses and mini vans locally referred to as ‘matatus’, will have to use a cashless payment system allowing public transport users to pay electronically. Currently, passengers pay the fare with hard money.
“We [public transport investors] are copying the best practices in the world. We know that advanced countries have gone cashless in their journeys. We want to show Africa that it is possible to do as others have done and it is not rocket science,” Simon Kimutai, Chairman at Matatu Owners Association told CNBC Africa.
According to Kimutai, investors in the sector have for a while endured theft by PSV crews due to a lack of an accounting system.
“Before, we never had an accounting system that would enable those who have invested in public transport be able to know what kind of transaction has happened in a day,” Kimutai said.
Most PSVs in Kenya do not issue a receipt to passengers indicating what they have paid. Therefore, the sector investors have had to endure big losses.
“Cartels in the industry have been moving up to 30 per cent of the growth collection. A study has shown that it has been very difficult for owners to receive their revenues intact as it is supposed to be at the end of business,” Kimutai explained.
Passengers will be required to get pre-paid cards for the cashless electronic system.
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A number of firms have already rolled out the system which includes Safaricom’s Lipa na M-Pesa, Fibre Space Limited’s MY 1963, Google in partnership with Equity Bank’s Beba Pay and a Hong Kong firm’s TaptoPay.
However, many Kenyans may be inconvenienced unless the government and players in the sector carry out a campaign to educate the public.
The introduction of the cashless payment was gazetted by the Kenyan government to streamline the PSV industry as well as enable the Kenya Revenue Authority (KRA) to collect taxes from the industry.