Safaricom has moved to lock-in public transport vehicles to its M-Pesa mobile phone payments service ahead of the government's July deadline for a ban on using cash in paying for bus fare. Safaricom corporate affairs director Nzioka Waita told the Business Daily in an interview on Tuesday that the company has already registered over 1,300 matatus and taxis in its Lipa na M-Pesa platform. The move gives Safaricom a head start over its rivals that have mobile phone payment systems, and also takes on the joint Equity Bank and Google BebaPay prepaid plastic card . "Over 1,300 PSVs and taxis have signed up and are using our Lipa Na M -pesa payment solution. Lipa Na M -pesa can act as both a stand-alone payment system or to be integrated as the payment component to an existing point of sale system," said Mr Waita . The government has gazetted regulations that will outlaw the use of cash for bus fare payments staring July 2014 . The move is expected to both help the Kenya Revenue Authority (KRA) to collect data on tax compliance in the sector, as well as reduce theft of cash by crew and bribery to traffic police officers to make it more investor friendly. The Economic Survey 2013 values Kenya's road passenger transport business, which is dominated by matatus, buses, motorcycles (boda bodas) and three-wheelers popularly known as tuk tuks, at Sh205 billion. READ: State plans pre-paid commuter fares This means that providers of electronic payment systems as demanded by the Safaricom and Equity Bank stand to potentially earn upwards of Sh2 billion annually assuming a transaction processing fee of one per cent for payments. Safaricom' revenues from M-Pesa stood at Sh21.8 billion in the year ended March 2013 , growing 30 per cent compared to Sh16.8 billion in 2012.This saw M-Pesa's contribution to Safaricom's total sales rise to 17.5 per cent from 15.7 per cent a year earlier. The new regulations were contained in a legal notice titled National Transport and Safety Authority (Operation of Public Service Vehicles) which was published in September 2013 . Mr Waita said that there needs to be strong legal backing for the cashless system if it is to be a success. The public transport sector has often gone up in arms to oppose any policy changes that introduce additional checks on the lucrative industry. "From the regulatory perspective, it will be essential for the Government to follow up this directive with adequate legislation that will underpin what is for all intents and purposes a very significant shift in the approach to revenue collection and accountability for public transport services in Kenya ," said Mr Waita . Equity Bank and Google's BebaPay pre-paid plastic card was launched in April and is already in use on various routes in Nairobi , though data on the registered users was not immediately available. BebaPay uses Near Field Communication (NFC) technology dubbed 'tap and go' where users tap the card on an NFC-enabled phone to make payments. Matatu Owners Association chairman Simon Kimutai , speaking during the launch of the card in April 2013 , said the cashless system would help investors in the industry to control their cash flows and reduce losses that they incur from theft by matatu crews. Under the Lipa na M-pesa system, PSV owners pay the telco a commission of one per cent based on the value of each transaction.
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