Financial institutions are coming up with innovative incentives for card users, a move likely to further push up contactless transactions.
A report released by research firm, World Data in June shows that the convenience of electronic payments, developing payment infrastructure, the increasing preference for contactless payments, and e-commerce market growth are all encouraging increased payment card usage.
The annual value of card transactions in the Kenya and payments market is estimated to be $2.3 billion (Sh297.2 billion) this year and is forecasted to grow at a compound annual growth rate (CAGR) of more than 10 per cent during 2024-2028.
This growth will be supported by a rising banked population, government financial inclusion efforts, the availability of basic bank accounts, and the adoption of the agency banking model to reach remote areas.
Even so, the use of payment cards in Kenya remains low due to consumers’ preference for cash and mobile payments, coupled with limited acceptance of payment cards at merchant locations.
The widespread popularity and acceptance of mobile payment solutions such as M-Pesa, hinders payment card growth in the country, according to experts.
This week, Co-operative Bank of Kenya partnered with Visa in a project designed to transform how medium and small business enterprises, cooperative societies, and corporate institutions in Kenya manage their expenses, empower employees and optimise financial control.
Together they have launched a Debit Card and a Pre-Paid Business Card that allows clients to enjoy credit with no interest, among other benefits.
The cards, which can be used both locally and internationally, enable customers to separate business expenses from personal expenses, make payments directly from their business account, access interest-free credit to manage cash flow, digitise and track office and travel expenses while enjoying business-centric discounts from selected Visa merchants globally.
Co-op Bank’s acting director of Retail Banking, Moses Gitau said the partnership is a milestone in the bank’s digital transformation journey in which it has invested heavily, including the successful upgrade of its core banking system in 2023 at a cost of more than Sh5 billion
“The bank is dedicated to drive innovation and support businesses in its digitisation efforts by bringing together the best in banking and technology,’’ Gitau said.
A fortnight ago, Co-op Bank received several awards including the highest IT accolade in the banking sector at this year’s CIO100 Awards which celebrate innovation, leadership, and excellence of organisations that have made a tangible impact on business operations, community development, and digital transformation across the African continent.
Visa East Africa Vice President and General Manager, Chad Pollock termed the launch as a significant milestone in the ongoing efforts to support small and medium-sized enterprises (SMEs) and commercial enterprises in their journey towards digital transformation.
“Digital payments are not just convenient; they are a catalyst for business growth and economic development. In today’s fast-paced digital world, businesses need to adapt to stay competitive, and digital payments play a crucial role in this transformation.”
Kenyan banks continue to focus on customer segmentation and value-added benefits to drive uptake.
For instance, in February 2024, KCB launched two premium cards: the Visa Signature debit card and the Visa Infinite debit card targeting high-income individuals.
The two cards are available by invitation only.
To boost non-cash payments, in May 2023 the CBK partnered with payment services providers, banks, and card schemes to launch the Kenya Quick Response Code Standard 2023.
The standard guides how payment services providers and banks issue QR codes for consumers and businesses to make digital payments.
