Why making Nairobi's matatus cashless failed

calendar iconJan 4, 2019

Kenya’s record with innovation is riddled with ambitious but short-lived experiments, including its capitol's crumbling cashless minibus policy.

Nairobi is recognised as East Africa's economic, business and technology hub, and as such, enjoys an inundation of commuters travelling to work or school. Approximately 70% of Nairobi’s 4 million residents use the 20,000 semi-formal privately-owned minibuses to get around.

In April 2013, Google and Equity Bank partnered to introduce BebaPay, a cashless card payment system that required a Google account and no bank account. People could purchase and top up their accounts in various locations. In its early days, people were reportedly optimistic about the new payment form, believing it would solve the lack of accountability when drivers hiked up the prices during bad weather or drove recklessly. Ironically, a BBC article covering The technology modernising Kenya's matatus, foreshadowed the cashless policy's end with its last quote:

"Sometimes it's a low-tech solution that works the best."
"Billy JackGeorgetown UniversityAssociate Professor of Economics

Excerpts from Kenya WallStreet

Nairobi’s failed cashless experiment, an attempt to digitise all commuter payments in Kenya is a poster child on the pattern of thinking that’s left a trail of struggling Fintech experiments in the name of Silicon Savannah...

“BebaPay, an Equity Bank product powered by Google who bring their expertise in payments and Near Field Communication (NFC) technology. The technology allows commuters to simply tap their BebaPay cards on a card reader to pay, making it easier for commuters to transact with operators.” read the press release.

“Matatu operators do not like BebaPay since it denies them that extra cash that they would have otherwise not remitted to the matatu owners. The operators we spoke to say the system is denying them ‘their fair share’ of the day’s proceeds. As a result, the operators sabotage it."
"'Matatu operators are opposed to the BebaPay'Standard media (Feb 23, 2015)As quoted by Kenyan WallStreet (Aug 3, 2018)

One and a half years later, after coming up against Africa’s informal sector, all these projects failed. I received an email from Google’s Ireland office with the subject “End of Bebapay Service and Discontinuation of Bebapay Website.” You would be hard pressed to find any one of them that actually works in Nairobi today. We have all moved on, like a bleep in memory.

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Last Updated: Feb 5, 2019