Mastercard to help EAC to develop a cashless economy

A Mastercard is working with national payment authorities in the East Africa Community (EAC) to encourage the adoption of a cashless economy, according to company’s Vice president and Area Head of East Africa.

James Wainaina told the Independent East African News Agency (EANA) that electronic payments would eliminate inefficiencies associated with cash including the high handling costs.

“A cashless economy will make the region much more efficient and therefore more globally competitive,” Wainaina said.

Mastercard currently has operations in all the EAC partner states.
He said his firm plans to roll out innovative products that will enhance the adoption of digital money.

“We have entered into issuance and acquiring partnerships with financial and non-financial institutions so as to introduce products for electronic payments,” he said.

MasterCard’s collaboration with Equity Bank will result in 5 million EMV-chip debit and credit cards being introduced in Kenya over a period of 18 months.

The cards will then be launched to  cover Uganda, Tanzania, Rwanda, and South Sudan.

Last year, Nakumatt Holdings and MasterCard launched one million prepaid, EMV cards and  multi-currency cards across the EAC.

“These cards will enable consumers to access payment services across the region , as well as the 210 countries  and 2 million ATMs where MasterCard is accepted,” he said.

He noted that advances in technology are empowering consumers in East Africa to search for product, compare prices, redeem offers, and make purchases on the go.

“MasterCard contactless technology is one way that we are keeping in step with these trends,” he said.

The vice president said that contactless payment technology will be rolled out in Kenya, Uganda, Tanzania, Rwanda and South Sudan through partnerships with banks.

He added that the  growth potential of the EAC is remarkable.
According to the World Bank Sub Saharan Africa's economic  growth is projected to hit  6.3 percent between 2014 and 2016.

“The adoption of electronic payments in East Africa is poised for growth thanks to recent and upcoming developments in the financial sector,” he said.

Mastercard said that with the financial and retail sectors pushing strongly for the use of electronic payments, the region is poised to reach parity levels with West and Southern Africa.

“For more than a decade, MasterCard has been working with industry-leading technology providers, merchants and other partners within the ecosystem to develop innovative solutions,” he said.

Wainaina said that a key component of MasterCard’s strategy is to introduce market-relevant payment solutions that will help consumers realize the financially inclusive benefits of electronic payments.

“We are therefore a champion of global mobile payments standards and fully support the creation of an open mobile commerce ecosystem that will drive the scale necessary for widespread adoption of mobile payments and bring consumers choice in East Africa,” he said.

In Kenya, MasterCard has already launched Mobile Point of Sale (MPOS) technology to aid small and medium size business owners access the convenience of mobile based payments.

He said that a cashless economy will also provide  easy access to other financial services .

“This will reduce the number of financially excluded people in the society,” he said.

Electronic payments will also help accelerate government’s programmes to disburse funds to the needy members of society.

Kenya has already introduced a cash transfer programme that targets the poor among the elderly, urban and disabled community.

In order to achieve the objective, there is need to ensure that only those who deserve get the monthly stipends.

He added that a well developed cashless economy can use biometric cards that will positively identify recipients using unique identifiers such as fingerprints so as to reduce fraud.

“It will also result in great savings in the disbursement of the funds,” he said. IPPMedia