Plastic card payment firms are banking on Kenyans’ preference for mobile phone based transactions to win more customers.

The two global giants of plastic card payment systems, MasterCard and Visa, have in the past one month

announced launches of mobile phone wallet technology that they intend to use to attract new customers.

MasterCard on Tuesday unveiled the mobile point of sale (MPOS) technology (already launched in Kenya jointly with Equity Bank) at the Mobile World Congress in Barcelona.

Visa, the largest provider of payment card networks in the world, is also undertaking a mobile payments pilot project in Rwanda with the intention of rolling out in Kenya by March.

“The MasterCard MPOS solution will allow Kenyan retailers who previously operated on cash-only basis to use mobile phones as point-of-sale (POS) terminals and accept electronic payments,” said MasterCard’s Sub-Saharan Africa division president Daniel Monehin.

The introduction of the technology is expected to make it easier for smaller traders to accept cashless payments via the mobile phones, which eliminates the need to lay expensive Internet infrastructure in remote areas.

MasterCard’s pilot project, which was first announced in mid-January, will be targeted at selected merchant retail outlets before being rolled out countrywide.

Visa’s country manager for sub-Saharan Africa Jabu Basopo said last week the new technology would “reach the roadside seller.” Visa is working with Fundamo, a mobile financial services provider it bought out.
“We want to perfect it. Once we are happy with the product we will roll it out with Kenya being one of the focus markets. The objective is to ease the use of cards,” said Mr Basopo.

MasterCard and Equity have partnered with an Indian mobile-based payment services technology firm.

“MPOS has the potential to transform payments in emerging markets. However, our experience in other markets has shown that technology is only half the battle,” said Ezetap’s chief executive Abhijit Bose.

“To be fully successful, you need a strong set of partners, who truly understand the needs and concerns of the local merchants and consumers.”

The area of mobile money is seen to have a big growth potential with many companies exploring ways to tap into people’s mobile wallets.