Safaricom takes on Visa and Mastercard with NFC enabled M-Pesa card

Mpesa card, wristband and phone sticker
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Safaricom has today launched  a new payment proposition called Mpesa 1 Tap. M-pesa 1 Tap reduces the number of  steps a customer requires to make Lipa Na M-pesa payments from eight steps to just two steps adding both speed and convenience. It was launched in Nakuru after a successful 6 months pilot phase and Safaricom is targeting 500,000 point of sale payment points across Kenya.

M-pesa 1 Tap will make use of a Near Field Communication (NFC) enabled card, wristband and a phone sticker just incase your phone does not have NFC. The merchants will be given POS units which are small enough to be hang around the neck of a merchant or a waiter as they walk around a restaurant.

All a customer has to do is tap the NFC enabled card, phone or wristband on the POS. When you tap the POS, it picks up your phone number and prompts the transaction and all you have to do is confirm he payment after which you can enter your M-pesa PIN to complete the transaction. This will enable customers save the time they would have used to go to the SIM toolkit, navigate 8 steps in order to make the payment which was quite tedious.

M-pesa 1 Tap works more or less like the Chip & PIN card used by banks nowadays whereby the Chip is the NFC in your phone, card or wristband and the PIN is your M-pesa PIN. So one can only use it if they have both your card/phone or wristband and your PIN which makes it secure.

Other then convenience, the service offers customers privacy as they can complete the transactions without showing the confirmation messages or have to shout out their phone numbers in the case of supermarkets. It will also reduce on errors that occur when one send money to the wrong Till numbers.

Merchants across the country will be issued with M-PESA 1 Tap Point of Sale terminals in line with the phased roll out.  Both customers and merchants will be issued with M-PESA 1 Tap payment devices and two subsequent replacements will be free. As is the current practice customers will continue making Lipa Na M-PESA Buy Goods transactions with M-PESA 1 Tap at no cost, with the exception of petrol station tariffs, betting and Pay Bills.

With this innovation, Safaricom is about to take on Visa and Mastercard who have been dominant in the Kenyan card market. Since most Kenyans use cards to pay for goods and services in restaurants and supermarkets the entrance of the M-Pesa card is likely to have an impact on their market share.