Cash to Contactless: Visa Moving the needle in Kenyan Digital Payment

The Africa Tech Summit Nairobi 2024, held on February 14th and 15th, brought together a diverse crowd of tech enthusiasts, investors, and entrepreneurs. It was great seeing diverse industry players, especially the Fintech space. It is not a secret that Fintech is now the prime mover of innovation in Africa, and it is getting bigger. 

 First, I was struck by a presentation by the Central Bank of Kenya which showed some interesting stats about the Kenya National Digital Payment system between January 2023 to December 2023. According to CBK, within that period 99.22% of the volume of transactions were done through mobile, payments through cards were only 0.59%, with EFT being at 0.08%, checks at 0.07% and RTGS at 0.04%.   It is important to note that when comes to the value of transaction RTGs took the lead with 55.45% despite the volume being the lowest at 0.04%, followed by 45.55% 

With the above numbers in mind, I went straight to Visa booth to try to understand what they have up to and whether they see mobile payment as competition or on for a strategic partnership within the Kenyan market. 

According to Visa rep, their success so far in Kenya is one of strategic partnerships and calculated risks. Recognizing the potential of a mobile-first nation, Visa partnered with local telcos like Safaricom to offer M-PESA, a mobile money platform that has become synonymous with cashless transactions. This integration allowed millions of Kenyans, previously excluded from traditional banking systems, to access financial services through their mobile phones. 

Here is the summary of how they are going about it: 

A Multi-Pronged Approach:

  1. Strategic Partnerships: Visa’s biggest weapon is its partnership with Safaricom, the operator behind M-Pesa. This collaboration allows M-Pesa users to convert their mobile money into Visa virtual cards for international online payments, tapping into a market otherwise inaccessible through M-Pesa alone.
  2. Physical Presence:  Visa is focusing on physical transactions. They’re investing in expanding their network of ATMs and POS terminals, especially targeting smaller merchants.
  3. Competitive Fees: Visa is offering attractive transaction fees to merchants, making them a more cost-effective alternative to mobile for certain types of transactions.
  4. Tap-to-Pay Technology: Visa recently launched tap-to-pay cards linked to M-Pesa, allowing users to make contactless payments at physical stores. This leverages the convenience of M-Pesa with the wider acceptance of Visa cards.
  5. Focus on Innovation: Visa is actively exploring new technologies like offline payments and blockchain-based solutions to address challenges faced by the Kenyan payment industry, especially in rural areas with limited internet access.

As you can tell from the above, Visa’s ambitions went beyond mobile money. The company has invested heavily in infrastructure, building a robust network of ATMs and point-of-sale (POS) terminals across the country. Importantly, they offered competitive fees to merchants, incentivizing them to adopt the technology. This strategy, coupled with targeted marketing campaigns, fostered widespread acceptance of Visa cards, making them a convenient and secure alternative to cash.


Meanwhile, the Visa Africa Fintech Accelerator program now accepting applications for its second cohort. Seed to Series A startups operating in Africa and that fall under the following categories are encouraged to apply on the Visa website, with applications open until February 29th, 2024.
-Unlocking money movement
-Embedded finance
-Empowering merchants and SMEs
-Payment infrastructure enablers
-The future of finance
-Sustainable and inclusive finance

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