Kenya, Tanzania grants Pesapal regulatory requirements


E-commerce and payment company Pesapal Limited has been accredited as a Payment Service Provider in Kenya and an Application Service License for Tanzania, amid the acceleration of the online payment industry in Africa, which has been growing since the beginning of 2020.

In a statement, Pesapal says the milestones will enable consumers and businesses in the two East African economies to make and receive online payments seamlessly. 

Kenya’s Central Bank has already granted authorization to Pesapal Limited as a Payment Service Provider (PSP) to carry out Payment Gateway Services in compliance with the law.

In Tanzania, the company has received the National Application Service License (AS) from Tanzania Communications Regulatory Authority (TCRA), effectively enabling Pesapal to operate in the country.

Commenting on the twin milestone, Pesapal Chief Executive Officer Mark Mwongela said the pandemic has accelerated the usage of digital payments.

He added that the firm is innovating to meet emerging customer trends like e-commerce.

“We are excited about the regulatory approvals. This demonstrates our commitment and ambition to impact the online payments ecosystem. I believe this will enable the e-commerce businesses to grow and expand further in East Africa,” Mwongela said.

Mwongela said the service, businesses can accept online payments seamlessly. Consumers, shoppers, tourists, and visitors coming to Kenya will have access to a secured payment service.

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Moreover, consumers will now be able to transact online from the comfort of their homes. All this will be carried out in a secured online environment.

“The pandemic has accelerated the move to a cash-lite economy. We are investing in Tanzania to reshape the future of commerce. For merchants, digital payments mean reducing costs associated with handling and losing cash, and broadening their customer base as more and more people move away from cash,” Bupe Mwakalunda, Pesapal Tanzania Country Manager said.

The company, which was founded in 2009, has operations in 6 African countries namely Kenya, Uganda, Tanzania, Rwanda, Malawi, and Zimbabwe. According to the firm, the financial technology (fintech) company offers e-commerce and point-of-sale (POS) payment processing support.

Online payment growing

The development comes at a time when a new report has indicated that the Middle East and Africa’s online payment industry has accelerated since the beginning of 2020.

According to the Research and Markets survey, one of the major drivers of the growth was the COVID-19 pandemic.

The survey says that consumers in the region were open to adopting digital payments and even trying new emerging ones such as cryptocurrency, biometrics, QR code, and others since these are fast, secure, and contactless.

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The report found that many people surveyed opted for using cryptocurrency more than they did last year.

In addition, even after the removal of social distancing/social isolation measures, most shoppers still preferred to use mobile phones/smartphones to purchase.

“Generally, in the countries of the two regions, card and mobile payments dominated,” the survey said.

In South Africa and Egypt for instance, the survey says that the value of card payments was expected to grow steadily in the next several years. In Egypt, the number of electronic cards increased considerably from December 2017 and exceeded 40 million in December 2020.

The survey adds that in Morocco, local card payments prevailed foreign card payments.

“The value of digital transactions via Moroccan cards rose to over MAD 4 billion (about EUR 400 million) in the first 9 months of 2020, while online payments value with a foreign card declined from 2019 and reached slightly above MAD 225 million (over EUR 21 million) in the first 9 months of 2020,” it says.

A February 2021 finding by the Central Bank of Kenya however found that the value of payments made through cards in 2020 dropped for the first time in 6 years amidst the lockdown measures and continued preference for mobile money services.

The CBK finding revealed that the value of payments through point of sale (POS) machines dropped by 3.8 percent in 2020 to Sh157.72 billion from Sh164.09 billion in 2019.

However, CBK indicated that despite the drop in absolute value, the number of transactions through POS machines increased by 1.49 million or 4.5 percent to 34.71 million in the year.

Wanjiku Njuguna is a Kenyan-based business reporter with experience of more than eight years.

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