With Zero Charges, you don’t have to pay transaction fees

Visa Zero Charges

One question that we have asked over the years, is how to overcome the barriers that slow down the take-off of Ecommerce and specifically m-commerce in Kenya and Africa at large.  Kenya is at that point where more people are embracing online transactions but the mystery of why the platforms for companies and start-ups in the sector are struggling remains. Take Jumia for example, it was hailed as the Amazon of Africa and raised more than Ksh.98 Billion (USD760 million) and made a splash while listing on the New York Stock Exchange at an initial price of $14.50.  Since then the stock has lost over 80% of its value and is currently trading at around $2.97 at the time of writing this article.

In the meantime, Jumia has been making loss after loss and the general consensus at this point is that “Amazon Africa” is not able to find clients or customers

Moving closer home, Safaricom tried its hands-on e-commerce with Masoko platform. At one point in 2017, Safaricom moved strongly with Msoko platform marketing and the expectation was high with some analysts marking it as the beginning of the e-commerce boom in Kenya. That was due to the fact that Safaricom has resources and could easily overcome trust and the delivery challenges that were thought of as the main barriers.

Three years later, in 2020 Safaricom gave up on Masoko.  By then Safaricom CFO Sateesh Kamath made the announcement:  “We are very happy for e-commerce companies to flourish. So, whether it’s competitors like Jumia of AliExpress or whoever it is when they flourish we are happy because our core M-Pesa business also grows. In terms of Masoko, it has been deprioritized because we are accelerating our focus on M-Pesa and some of the other product lines that we need to do.”

At this point, it might be smart to go back and try to figure out the real challenge/s making it hard for start-ups and other companies to succeed in e-commerce in Kenya. And the answer could be about two things, the cost of transactions and the speed of delivery.

For today I will concentrate on the cost of the transaction but before that let me say a few things about the speed of the delivery. Kenyans are known to be last-minute people. This is more evidence that there is a deadline do to things. Whatever the deadline, be it tax returns, voter registration, or closing time for banks, towards the end is when the majority of Kenyans make a dash to carry out the given task. Assuming someone wants to eat lunch at 1 pm and has only 30 minutes to do so. In most cases, they would put the order at 1 pm and unless that lunch can get there within 20 minutes they would not have time to eat it. In that case, they are better off looking for the nearest restaurant, where they can go physically to eat and pay in cash.

Food might be a unique example to use here but it is true that the majority of people look for things at the point when they really need to use them and hence most online platforms are not able to deliver them in good time. The majority of the online deliveries in Kenya even in the case of Food take close to two hours and way more.

Back to the main point of the day, the transaction costs. The Kenyan market is a cost-sensitive market and it is possible that most vendors and start-ups have never taken this into account. And it is not just the cost alone, people believe that they can negotiate the prices down and get the best deal possible.  So if the initial price for a pair of trousers is Ksh.1,000, then there is a chance that you would probably buy it at Ksh.500 or even less depending on your negotiation skills. That kind of negotiation can only happen face to face, while online platforms have fixed prices.

On top of the prices, there are transaction costs. For example, I buy a lot of digital products like domains, hosting, website themes, apps, and the like, and most of the time on top of the listed price, I end up paying more to cater for the cost of transactions. Most Kenyans do not like that. Take for example when the mobile money to bank account charges was removed by the Central Bank of Kenya due to Covid 19 but then reintroduced. Most people did not like the reintroduction of the charges and some rushed to court which eventually suspended the reintroduction pending the hearing of the case. While that was great news, banks got the order to be overturned and then continued charging the transactions fee apart from one local Bank which waved the charges permanently. The huge number of people who moved to that bank after the waiver was announced, was a clear demonstration that Kenyans prefer lower transaction costs or none at all.

So a few weeks ago when someone reminded me about the payment by visa cards with zero charges. I thought that might be it for Kenyans. With a Visa card, you can enjoy a seamless and cost-effective payment experience that lets you do more with your money.

Visa Zero Charges

Use of Visa card

Zero Charges means that when you pay with your Visa card, whether online or in-store, you incur no extra transaction fees from Visa. This way, you can save more and spend more on the things that matter to you. Visa card payment eliminates any fees that Visa would normally charge for processing your payments. For example, if you buy something online for Ksh 10,000 with your Visa card, you will only pay Ksh 10,000 and nothing more. The same goes for any purchases you make at local merchants, such as supermarkets, restaurants, petrol stations, or entertainment venues.

However, please note that some merchants may charge their own fees for accepting card payments. These fees are not related to Visa and are beyond its control. You should always check with the merchant before paying with your card if they charge any additional fees.

What are the benefits of a Visa card?

Visa offers many benefits for Kenyan consumers who want a convenient and reliable payment option. Some of these benefits are:

  • Zero charges. As already mentioned, you don’t pay any transaction fees when paying merchants (the majority of them) via Visa card.
  • Contactless payments: You can use your contactless-enabled Visa card to tap and pay without having to physically hand over your card or enter a PIN. This is a secure and fast way to pay that reduces contact with surfaces and other people.
  • Card safety: You can rest assured that your Visa card is protected by advanced security features that prevent fraud and identity theft. If your card is lost or stolen, you can report it immediately to your issuer who will block it from further use. You also have the benefit of Visa’s Zero Liability Policy which covers you from unauthorized transactions on your account.
  • Global acceptance: You can use your Visa card anywhere in the world where Visa is accepted. That means over 200 countries and territories and millions of merchants. You don’t have to worry about carrying cash or exchanging currencies when traveling abroad.
  • More value: With no extra fees from Visa, you can get more value from every purchase you make with your card. You can also enjoy exclusive offers and discounts from various merchants who partner with Visa.

Visa’s mission is to connect the world through the most innovative, convenient, reliable, and secure payments network, enabling individuals, businesses, and economies to thrive. With visa card payment, you get more than just a payment method – you get a payment experience that lets you do more with less.

Read: Microsoft partners with OCP Africa to enhance digital agriculture platform for food security in Africa


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