To facilitate the launch of contactless payments in Kenya, Visa is collaborating with Kenyan financial institutions and technology startups so that customers will be able to conduct business without needing to carry a wallet or card with them physically.
Customers can utilise the Thales-powered service to make in-store purchases using their banking app by tapping their smartphones equipped with near-field communication (NFC) at any contactless payment terminal.
Why is it necessary to do this? In addition to their convenience, contactless payments offer a higher level of safety than purchases made with magnetic-stripe cards, which can be easily counterfeited by con artists.
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According to Investopedia, the data entered for a contactless transaction is encrypted, making it difficult to steal or intercept the information. Because each transaction is recorded, both the client and the business are able to maintain a clearer picture of their respective financial situations. The lower the amount of cash that is kept on-site by vendors, the fewer security threats there will be.
When was the last time we saw this? Kenya Commercial Bank (KCB), Visa, and Thales worked together to establish a contactless payment solution in June of 2023.
In the month of May 2017, Safaricom introduced a contactless payments service known as M-PESA 1Tap in the county of Nakuru.
After another four months, the telecommunications company expanded the service to an additional five counties, adding Nairobi, Mombasa, Kisumu, Eldoret, and Nyeri. At that time, there were over 90,000 clients and 2,000 merchants who had signed up for the service. However, the contactless payments service succumbed to its natural causes and is no longer available.
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More About the Collaboration
Visa is now working with Kenyan banks and fintechs to introduce the service to the country. Customers with Android phones or Garmin watches can now conduct contactless financial transactions using this new technology.
Visa recently gave the media a tour of its Sub-Saharan Africa (SSA) Innovation Studio in Nairobi, where they demonstrated this payment technology. Kenya Commercial Bank (KCB), Absa, and Loop are just a few of the banks that are collaborating with the global payments technology firm.
Customers can now use their banking apps to make in-store purchases simply by tapping their NFC-enabled smartphones on any contactless-enabled payment terminal.
Customers may experience a new level of simplicity when making purchases thanks to the service, which is powered by Thales, a leader in digital security, and which leverages Visa’s tokenization capacity.
Visa has stated that it is always collaborating with its banking sector partners to offer new and improved experiences for consumers.
At the media event, Little also demonstrated how its driver app now supports Visa’s Tap To Pay mobile payment system. Customers will soon be able to use the new function to pay for rides with the help of the technology.
The latest data from Central Bank Kenya (CBK) shows that the number of transactions made with bank cards to buy goods and services increased from a low of 676,275 in August 2014 to a record high of 4.4 million in May 2022.
This development is indicative of rising consumer expenditure and the allure of this method of payment.