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Public transport has always played a vital role in the heartbeat of the African continent, giving people a much-needed way to get to work and earn a living. With an estimated 70 per cent of Africa’s urban population residing in informal settlements, these transport lines have been essential in helping families to access regular income and carry out their day-to-day lives.

Almost three-quarters of Nairobi’s four million people use around 20,000 privately owned mini-buses as their primary mode of transportation. Yet Nairobi commuters risk being overcharged when it rains, at rush hour or if roads are closed to motorists, with fares on certain routes quadrupled during these high-demand periods.

Digitisation has always been a possible solution to creating more transparency and accountability but has historically faced resistance. However, as COVID-19 began sweeping through crowded transport systems in 2020, reducing physical transmission through cash quickly became a key priority. The pandemic suddenly gave digital technology an unprecedented opportunity to overcome resistance and swiftly integrate with transport systems where it was needed most.

When we entered the African market, we knew that there was a demand for our services, but we had no idea how urgent that demand would be. Matatu buses dominate transportation options across the country and are used by 70% of the Kenyan population, and 90% of mobile-money transactions go through the popular mobile wallet M-Pesa, which boasts more than 50 million active monthly users across the continent.

These trends prompted a pilot where a thousand Matatu buses would digitise payments and start accepting cashless fare collection across Kenya. Leveraging M-Pesa, a mobile phone would now be able to act as a bus pass, providing a seamless and secure way for people to access the routes they use every single day. Users put in a code on their phone that debits their wallet, and drivers can immediately see this to let them onto the bus.

The innovative platform removes the need for fiddling with unnecessary tickets and cash payments, providing an accessible payment solution that consumers already use via a device already in their hands. This removes the need for physical tickets and cash payments, but it also speeds up transactions and allows buses to move more quickly through heavily congested routes in Nairobi.

Importantly it also increases transparency in fare collection between the drivers and the bus owners. In the past, public transport in Africa has operated as an informal sector. It has a generally poorly organised cash-based system that lacks integration or regulation, making it difficult for planners and authorities to improve services. Yet now, the demand for digitalisation has been pronounced, with the pilot growing tenfold during the COVID-19 pandemic.

In only a couple of years, automated digital fare collection has been adopted by over 10,000 Matatu buses, helping to normalise the idea that the bus fare can be paid using only a mobile phone. This perhaps comes as little surprise as Kenya has always been a mobile money pioneer in the African continent.

Mobile money is widely used in Kenya, with transactions carried out at agents rising to 60% of the gross domestic product in 2021, compared to 23% in 2010. Kenya boasts some of the highest mobile payment adoption rates in the world. Last year, mobile phones were being used as a payment method by 84% of Internet users in Kenya, compared to 19.9% of the population in the UK. Mobile payments can provide financial inclusion for those who are unbanked or underbanked and do not have access to a traditional bank account.

Another example of the rise of contactless payments in African transport is Moja Ride, helping to digitise transport in the Ivory Coast. Since launching, Moja Ride has gained a growing market share across multiple transport services in the city, supporting over 1,200 taxis and buses. The application allows commuters to book and pay for their rides digitally while also enabling transport operators to manage their fleet, routes and payment methods.

Moja Ride enables public transport drivers to accept different payment methods from passengers, including QR codes, NFC, and prepaid cards such as the ‘Moja Carte’, which can be topped up to pay for public transport. The recharge is done either through mobile money or a network of agents. Transport operators, owners and drivers can also track their revenue in real-time and manage their fleet for the first time. Currently, there are hundreds of rides booked a day.

While much has been rapidly accomplished in a relatively short time, there is plenty of room for further growth. Mobile payment is a pattern that is not going anywhere, and its implications for the transport sector are vast. The digital revolution sweeping through Africa is creating more efficiency, transparency and connection than ever before, and the effects will be seen for decades to come.

About Frank Molla

Frank Molla is Managing Director, Sub-Saharan Africa.Certified as a master negotiator by Harvard and Strathmore business schools, Frank Molla joined BPC in 2021 to lead the organisation’s expansion in sub-Saharan Africa. With over 15 years of experience in the payment industry, Frank is an accomplished executive with experience across diverse markets from Europe to Africa.

Prior to joining BPC, Frank drove Mastercard’s business strategy in Eastern Africa through innovation and technology with the aim of building payment ecosystems and solutions and achieving financial inclusion in key markets. At American Express in Spain and the United Kingdom, he led efforts to identify, grow and defend the company’s market share in sub-Saharan Africa in the corporate multinational space and bank partnerships. His career started at Barclays Bank of Kenya, where he held several senior commercial manager roles.

Frank is a graduate of the Harvard Business School (Boston, USA), as well as an alumnus of Nanyang Business School in Singapore and Strathmore Business School in Kenya. He also successfully completed the Senior Management Leadership Program (SMLP) at Strathmore Business School in 2019.

A firm believer in servant leadership, he has enhanced his mentorship, management and leadership skills through actively engaging in Harvard’s Management Mentorship programme.

He was selected for the Future Senior Leadership Programme by Mastercard MEA in 2019. Globally, he was voted as one of the elite individuals who have achieved Mastercard’s most prestigious sales awards in excellence, leadership and achievement, receiving the 2020 President’s Club Award.

He was voted the president of the Senior Management Leadership Programme class of 2019 and represented the cohort while at Strathmore Business School.