M-PESA plans to launch physical debit cards in partnership with Visa, the global digital payments giant.
The new cards will allow M-PESA customers to make purchases beyond its virtual GlobalPay offering.
“As part of this strategy, Safaricom has achieved PCI DSS compliance, which builds on our strategic partnership with Visa, expanding M-PESA’s payment capabilities to include card issuing and acquisition,” M-PESA Africa said.
“PCI DSS compliance enables M-PESA to begin offering tap-to-pay card payments for more than 60 million customers, 5 million businesses, and 100,000 developers across our entire ecosystem.”
In line with our purpose of transforming lives, we are innovating our payment solutions to provide customers and businesses with more options and additional convenience. pic.twitter.com/gVeA5KkwGu
— M-PESA Africa (@MPESAAfrica) December 16, 2023
M-PESA has transformed digital payments in Kenya but has not made much impact on the physical retail space.
Data on credit and debit cards usage in Kenya
According to the latest statistics, the value of transactions using credit and debit cards in Kenya was Ksh 18.8 billion in August 2023, a slight decrease from Ksh 19.1 billion in July 2023.
The number of transactions was 2.4 million in August 2023, down from 2.5 million in July 2023. The number of ATMs, ATM cards, and POS machines in Kenya was 3,097, 16.9 million, and 42,986, respectively, as of August 2023.
The Central Bank of Kenya (CBK) has been promoting the use of credit and debit cards as part of its national payments system strategy, which aims to enhance efficiency, safety, and inclusion in the payments sector.
The CBK has partnered with Visa to launch the Kenya Electronic Payment and Settlement System (KEPSS), a real-time gross settlement system that enables cross-border payments within the East African Community (EAC) and the Common Market for East and South Africa (COMESA) regions.
The regulator has also issued guidelines and regulations for payment service providers, including card issuers, acquirers, and switches, to ensure compliance and consumer protection.
However, credit and debit cards still face some challenges in Kenya, such as low penetration, high costs, fraud risks, and societal stigma. Only 6.35% of Kenyans over 15 have credit cards, while debit card penetration stands at 22%.
Visa benefits from partnering with M-PESA, as it gains access to its large user base and strong presence in Kenyan life. Visa can also leverage M-PESA’s platform to reach the fast-growing digital payments market in Africa.
The new cards will work across the eight countries where M-PESA operates.
“Fintechs and financial institutions can also use our card processing capabilities, enabling them to offer complete mobile and card payment solutions,” M-PESA said in a statement on X.
