Absa Bank Kenya introduces contactless payment solution

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bsa Bank Kenya has introduced a new contactless card for retail transactions. The new solution will enable cardholders to conduct contactless transactions by tapping the card on POS devices.

The card can be used for purchasing goods and services at fuel stations, retail stores and other outlets. It comes as the ongoing Covid-19 pandemic has accelerated the adoption of digital transactions. Absa Bank’s move follows that of Standard Chartered, who initiated a mass rollout of contactless cards across Africa in November.

Standard Chartered is currently enabling the contactless payment capability for customers across 15 markets on the continent including Botswana, Ghana, Kenya, Zambia, Malawi, eSwatini, Tanzania, Uganda, Namibia, Lesotho, Mozambique and Zimbabwe.

In Africa, cash usage is the preferred payment method – in Nigeria, cash accounts for 95% of transactions. However, Covid-19 has caused worries that handling ‘dirty’ cash will add to the spread of the virus. By rolling out contactless cards, Absa Bank and Standard Chartered hope to address this issue.

The second most prominent payment method in Africa is mobile money, with providers such as M-PESA the first choice. M-PESA began as a SACCO loan disbursement and repayment tool but quickly took note of customer behaviour, revamping its product as a money remittance tool. And as a result, the mobile wallet is still dominant today.

Mobile Money is particularly popular in Kenya, where M-PESA first launched. Here, the penetration is above 100% due to many customers holding multiple SIM cards. M-PESA controls more than 80% of the market. Despite the strong use of mobile money, the moves to contactless cards by Absa Bank and StanChart suggest the payments landscape is maturing as the African payments options available to consumers is becoming more diverse.