Equity Bank and MasterCard on Tuesday announced the launch of Equity Debit and Credit cards featuring MasterCard's PayPass technology. This makes Kenya and Equity Bank the first in Africa to feature MasterCard's PayPass which uses Near Field Technology. The announcement was made on Tuesday afternoon at an event at the bank's headquarters -Equity Centre. The launch was attended by Professor Njuguna Ndung'u, Central Bank Governor, Ajay Banga, President and CEO MasterCard Worldwide, James Mwangi, Equity Group CEO and other senior members of staff at both Equity and MasterCard.
PayPass' implementation of Near Field Technology (NFC) in payment cards enables easier check out at tills and retailers by tapping the cards to process payments. Banga says the process is 25 percent faster than swiping cards.
Mwangi says the bank will issue 5 million PayPass enabled cards and also overhaul all POS it has issued to support PayPass. As a safety feature, the cards also feature EMV chip technology rather than the traditional magnetic stripe. In addition, kiosks and other small retailers who are not in a position to afford traditional PoS points will be issued with PayPass enabled mobile phones. With the mobile phones, the kiosks and small retailers will be in a position to accept and process payments from cards issued by Equity Bank.
The same platform will the be extended to Uganda, Tanzania, Rwanda and South Sudan. The CEO hopes the move will help cement Equity Bank as the leading bank in the region. The bank has 7 million account holders in Kenya.
In a bid to promote uptake of the product, Mwangi said that payments made at kiosks will attract no transaction fee.
Cards in the country grew at 15 percent last year to stand at 10.6 million. Visa holds a majority of share of merchant cards issued in Kenya. Virtually, all merchant cards issued in the country were Visa until Equity Bank's announcement of the MasterCard partnership. The bank holds about half of all bank accounts in Kenya.
Equity Bank runs on a platform supplied by Infosys, HP, Oracle and Microsoft and a Way4 online card management system. It can handle 35 million accounts and process multiple currencies from multiple firms and in multiple countries at 180,000 transactions per minute and support 60 million cards.
According to statistics published by the Central Bank of Kenya, in November 2012, Kenya had 2361 ATMs and 18,435 POS machines.
MasterCard also announced that they would be launching a training centre in the country to educate both it's staff and members of the country in usage of the card.
According to the Finscope Rwanda 2012 survey, financial exclusion in Kenya, Uganda, Tanzania and Rwanda stands at 33 percent, 30 percent, 56 percent and 28.1 percent respectively. The two organisations hope at driving the figure higher by allowing small traders to easily accept payments. Ndung'u said that the poor are usually left out of financial systems due to the high costs of financial transactions and the associated risk.
With the passing of the Microfinance Act, the Central Bank is trying to come up with the regulations and complete financial infrastructure to support the act. This include banking agents that provide deposit and withdrawal services for banks in the country. Kenya has 15,000 agents with Equity having 6,300 agents.
Banga says that cash still remains dormant across the world, with 85 percent of transactions in cash. Up to 99 percent of transactions in China and India in cash and 50 percent in the United States. He says that cost of printing and delivery of cash costs between 0.5 percent and 1.5 percent of the Gross Domestic Product of most countries.