Rwanda launches cashless public transport payments – Will they succeed where Google failed in Kenya?

09e7cd994941d7a07b166230124cb382Public transport is going cashless in Kigali, Rwanda, with smart card payments and mobile money schemes being launched simultaneously with much fanfare. Can Kigali succeed where regional giant Kenya failed a couple of years ago?

Nairobi’s attempt to impose cashless payment technologies in public transport (particularly the matatus, ubiquitous white mini buses that ply the roads) began in mid 2013, when tech behemoth Google partnered with Equity Bank to launch the now defunct BebaPay card. What happened next can only be called a case study of how not to introduce service innovation in the informal economy of sub Saharan Africa. And they weren’t the only ones, yet none of the contenders are still operational today.

“So what’s different about Rwanda’s approach, and what are its chances of success?”

The first thing I noticed is that the NFC enabled smart cards are being validated by the device attached to the vehicle, as can be seen in the photograph above.


This payment system has been developed by a local Rwandan IT company, launching the service in partnership with government and transport operators.

The Tap&Go smart payment solution, by AC Group, seeks to automate public transport payment systems and to promote cashless economy, according to Patrick Buchana, the firm’s chief executive officer. The initiative is a joint venture between AC Group, a Rwanda technology company specialising in smart transport solutions, the government and city bus operators.

Buchana said the firm has already concluded an eight month-pilot study for the solution, and had mounted validators on selected buses to read and accept payment. Contactless cards were issued to commuters, he added.

“The system will ease revenue collection for bus operators. It also has ability to monitor the location of the bus, its speed and information about passengers onboard,” he explained.

“The system is designed to benefit Rwandan economy as it seeks to support the country’s efforts to become a cashless economy,” Buchana told The New Times.

He said the tech firm is currently working with Kigali Bus Services (KBS), adding that they will roll out the project to bring on board other bus operators.
With the system, commuters will be able to top-up their cards from mobile agents along bus lanes, as well as USSD mobile top-up channels with mobile money, Tigo Cash and Airtel Money, and Pivot Access agents.

Comparing with the Kenyan experience

One can see immediately that the Rwandan strategy learnt from the Kenyan attempt of two years ago. The system was designed locally, allowing for changes to be immediately incorporated during the pilot testing phase. The positioning of the solution focuses on benefits to society and the customer, rather than bus owners and their profits.

According to Charles Ngarambe, the KBS executive director, the service will help bus operators make informed decisions.

“It will enable us to switch from a paper ticketing system to a more environmentally-friendly and advanced electronic payment system. This will save time and reduce on transaction costs, thus making the industry more efficient and profitable,” Ngarambe, also the chairperson of the Association of Public Transporters, said.

Even the pricing of tickets was considered, if one goes by this excellent Master’s thesis by Rwandan urban planner David Niyonsenga:

kigali bus fareThe key here, when moving from the ad-hoc informal sector to formalization of the financial and information flows, is to ensure that incentives for the stakeholders involved in implementing the solution are taken into consideration.

The Kenyan initiative’s launch was accompanied by boilerplate talking points which emphasized the monetary gains and revenue opportunities rather than any social and developmental benefits.

Matatu Owners Association chairman Simon Kimutai, speaking during the launch of the card in April 2013, said the cashless system would help investors in the industry to control their cash flows and reduce losses that they incur from theft by matatu crews.

Nowhere in the press releases by the various solution providers was any mention of the impact of their systems on the operator’s incomes.

Firms are seeking a slice of Kenya’s lucrative public service vehicle (PSV) industry valued at Sh205 billion and is dominated by matatus, buses, boda-bodas and tuk tuks.

This has whetted the appetite of Safaricom, MasterCard, Visa, Equity Bank and Google who stand to rake in at least Sh2.05 billion annually in revenue by processing fare payments for PSV operators.

This same opportunity space, has been framed very differently in Kigali, as one can see from MTN’s press release:

In an effort to serve and bring greater convenience to its customers, MTN Rwanda has announced a partnership agreement with Rwandan bus service companies that will allow commuters going upcountry to pay their bus fares conveniently, easily and safely using MTN Mobile Money.

retirementNot only has the local operating environment been taken into consideration but additional cashless services have been launched in this same time frame to provide incentive.

Strategies that lower the barriers to adoption

I wrote back in March 2014 on the BebaPay fiasco:

There are two main challenges that I see here, which don’t seem to have been taken into consideration during the development and implementation process:
1. The impact of introducing this service on the end-users
and the
2. The characteristics of the cash based informal sector.
That is, if one were to say that the design of a new service should take the people and their operating environment into account as much as the actual technology and platform, then this is yet another example of technocentric design failing to meet its promise once introduced in the market.

From this vantage point, we can see that the Rwandan launch was carefully coordinated and positioned in a manner most likely to lower the barriers to adoption, which bodes well for its future. But all is not roses, as the city struggles with rapid urbanization, scrambling to provide  services to a growing population. Only time will tell how well this project succeeds.


  • The main reason for the failure in Kenya is 2 fold
    1. It was money drivem government and owners sought to extract the maximum amount of money from the system
    2. Exclusionary. The goal seemed to be to exclude the very people who run the system – the drivers and conductors form the benefits of the system i.e capture more revenue with no incentive to increase earning for the drivers and conductors
    3. More importantly the people who designed this system are themselves not users they designed for the ‘other’

  • Great article! Would love to connect on this! Have sent you an email on the connect page.

  • There are factors the author failed to point out. The cashless effort was a government policy which was not well researched before implementation. Kenya is a very big market, with multiple transport hubs as compared to Rwanda. The stakeholders in Kenya are very diverse.

    It would be transparent to mention that AC Group is affiliated with Kigali Bus Service and not all Rwanda public transporters have embraced the technology. AC Group implementation approach through use of their ‘affiliated’ buses does not call for a success dance yet. The benefits mentioned in the article for the end users (travelers) are aspiration. The main benefit is for the merchants ‘According to Charles Ngarambe, the KBS executive director, the service will help bus operators make informed decisions.“It will enable us to switch from a paper ticketing system to a more environmentally-friendly and advanced electronic payment system. This will save time and reduce on transaction costs, thus making the industry more efficient and profitable,”

    Kenya is very fast paced business environment and does not give one the liberty to dip your feet. You dive and swim with the sharks. Recent technology success stories such as Mobile money (Mpesa) makes any investor ‘go big’ in the Kenya market.

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