09 Dec AFRICAN PAYMENTS: KENYA eCOMMERCE AND ONLINE PAYMENT MARKET IS GROWING RAPIDLY
The African payment gateway market is hotting up and regional gateways are consolidating and looking for ways to get a bigger foothold in the market. Recently Interswitch backed by Helios bought Paynet which is an East African POS and ATM switch. It is a challenge for payment providers to get international merchant funds out of Nigeria which is having a negative effect on Nigerian online payment solutions, Nigerian eCommerce payments and Nigerian online credit card payments. Paynet is a B2B switch providing outsourcing of ATM and POS solutions for Kenyan banks and Interswitch were looking for a footprint and regional acquiring. Paynet is PCI compliant and took a number of banks from magtape to chip and pin and operate a number of ATMs for small Kenyan banks. Although Kenya is ripe and ready for online with increasing incomes, increasing mobile connectivity and simple and pervasive payment methods like M-Pesa, eCommerce is still small. International eCommerce merchants are rapidly entering the Kenyan market looking for Kenyan online payment solutions, Kenyan credit card payments and Kenyan eCommerce payments in general. As a result of the slow implementation of 3D Secure, fraud is moving from POS to online. There is a big push to get issuing and acquiring banks enabled for 3D Secure. Acquiring by African Payment Solutions includes mandatory 3D Secure so there is a liability shift which protects merchants. There is minimal local switching of private label cards - most of the issuing is on the MasterCard and (mainly) Visa networks these days. POS is a static and slow growth channel and internet acquiring is growing. Interswitch’s Verve card is making a big play for market share at a low acquiring cost. KCB has recently gone live with Verve. The local mobile money payment methods are M-Pesa, Airtel Money and Telkom Kenya (previously Orange). 3D Secure is coming. Really! NIC Bank in Kenya have recently implemented 3D Secure and Cardinal Commerce has in country resellers. In Kenya M-Pesa payments are widely adopted and the ease with which Kenya M-Pesa payment solutions are used by local consumers has led to a double digit year on year increase in Kenyan M-Pesa transactions via Point of Sale and online.