Safaricom set to introduce a - surprise, surprise- Lipa Na M-PESA Card

It’s no secret, short range payments are M-PESA’s Achilles heel. Safaricom’s celebrated remittance service has simply failed to take off in short range payments. When it comes to making payments at the till M-PESA simply doesn’t cut it. Half a decade after the introduction of in-store M-PESA payments, the overwhelming majority of payments at the till — eight out of ten — are still made in cash in Kenya, the birthplace of M-PESA.

Safaricom claims to have processed KES 20 B [USD 200M] in Lipa Na M-PESA payments so far, at over 44,000 participating merchants. This number of merchants is far below Safaricom’s stated target of acquiring 100,000 merchant by March 2014 when the firm launched an above the line campaign for Lipa Na M-PESA in June 2013. A lot of large retailers appear to prefer the Paybill service that places the burden of commissions on the customer. Many, including my local supermarket have rolled back Lipa Na M-PESA in favour of Paybill and cash. Merchants are charged a commission of 1.5% for all Lipa Na M-PESA payments , an amount many feel is too high.

Well Safaricom are reportedly looking to a NFC enabled card to solve this problem. Never mind that M-PESA and Lipa Na M-PESA have long been touted as the card killers.

Far from being archaic obstinacies, cards are just better at some things. Like payments. They are inexpensive and don’t require any specialized equipment or device to be carried by the owner. Perhaps most importantly, cards never run out of charge. Safaricom seem to agree. They are following in the footsteps of Airtel Kenya and will be launching their own Lipa Na M-PESA card in the near future.

The Lipa Na M-PESA card will be linked to your M-PESA account much like Airtel’s Airtel Money VISA card is. Swiping the card will debit your M-PESA account. The NFC enabled, PIN based card is being piloted among Safaricom staff at the moment. Safaricom started the trials yesterday. There are plans to expand this initial pilot to university students.

Airtel Kenya’s similar product , the Airtel Money card, was dealt a severe blow by the closure of its issuing partner Chase Bank in May. The Airtel Money card had been plagued by service outages prior to that since its launch in 2014 and failed to take off in any meaningful way. With Chase Bank announcing yesterday that they were restoring their card services, there might be hope yet for the Airtel Money card.