The payment system, also known as JamboPay, is running on pilot to enable it integrate existing paperless systems into online payment. file
Kenya could well be staring at its first locally developed online payment system that enables users to buy and pay for services from the comfort of their computers.
Although online payments are not entirely new in Kenya, they are limited to credit card users numbering 107,000 by 2008 according to the Central Bank of Kenya (CBK).
This number is too small to sustain online payments and local businesses have found it unviable to accept credit card payment as their only mode of payment. But since there does not exist a local online payment system, it has meant slow growth for the whole concept.
The paperless modes of payment existing today include paying for goods and services using mobile telephones cash transfer systems or paying at the point of sale using the debit card.
Finding a way to integrate the existing paperless payment systems to a localized online platform would mean an exponential growth in the number of Kenyans who can shop online.
Web Tribe Limited, a local software development and network security company has developed what it is calling micro payment system, that enables local users to maintain virtual accounts over the internet that they can load with money and use to purchase goods and services from selected internet shops.
The payment system, also known as JamboPay, is running on pilot to enable it integrate existing paperless systems into online payment.
JamboPay is currently on unrestricted pilot meaning that users visiting the website are able to register and use the service for free. The test is being carried out by Web Tribe and a local commercial bank that requested anonymity until it officially announces the partnership.
“The project is now live and users can make purchases from selected websites,” said Danson Muchemi, the business development director of the company.
The company has partnered with seven websites and seeking to partner with more. “We are not limiting the number of websites we can partner with because we want users to have as many options and varieties as possible,” he adds.
Failure of the country to have an online payment system is curious especially because of the reasonably-bigger pool of software developers in Kenya and infrastructural support in the fibre optic cable . The delay could also be attributed to failure by banks to fully embrace the online payment system because for such a solution to work, banks must partner to clear payments.
On Wednesday this week, this appeared to change when I&M Bank launched a new e-payment service, which will allow merchants (online shop owners) to accept online payments through credit and debit cards on their websites. Use of debit cards issued by all banks and not only the settlement bank is what would result in an increase of capable online shoppers.
To become a user of JamboPay, a user logs into the website and creates an account. Once the account is created, it is required to be topped up in order to have the cash to make purchases. By the time the pilot is complete in the next 30 days, users will be able to top up their virtual accounts using mobile service money transfer systems.
“We are working with banks to enable users to top up their accounts using debit cards which tend to be more popular than the credits cards,” said Mr Muchemi.
Currently, users can top up their user accounts by feeding in their credit card details directly into the website. The user then decides how much to put in his virtual account. Alternatively, the virtual account can be topped up physically by depositing money into the account of the partner bank.
Partner websites also register on Jambopay to express their interest to use it, but must undergo a vetting process to ensure users are not exposed to fraudulent purchases. To make purchases, users visit the websites selling goods they are interested in, make selections and when complete, the shopping card directs them to the payment system.
Here, they open their virtual accounts and authorize payment of the required cost. “Users are not charged for using the payment system. It is the owners of the websites who pay 3-5 per cent of the total transaction,” said Mr Muchemi. Once the purchase is made, the product is delivered as per the instructions of the vendor.
However, security concerns are critical and have been identified as one of the major inhibitors to the use of credit cards in Kenya. Mr Muchemi said JamboPay is operating under the regulations of the Communications Commission of Kenya, and uses a system that does not capture user’s credit card or debit card details. The system only maintains the name of the user and the contact details.
“We are the local affiliate of McAfee network security systems so we are able to use these platforms and skills to make our own systems secure. … The McAfee security systems that we sell in Kenya are able to detect network weakness, and preempt possibilities of hackers getting into a system because they scan the system all the time and give reports on where the weaknesses exit.
He said Kenyan consumers buying online from other website that do not necessarily use JamboPay should only purchase from websites that display trustworthy security signs.
Source: Business Daily Africa
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