Matatu operators are once again facing the specter of PSV cashless payment, as a major insurer issues an ultimatum to all vehicles covered by the underwriter, demanding the implementation of the system.

The initiative revives memories of 2014 when the Kenyan government, through the National Transport Safety Authority (NTSA), attempted to enforce cashless payments but faced challenges due to insufficient infrastructure and reluctance from matatu users.

In a surprising move for PSV operators, Direct Line Assurance requires all public service vehicles insured by the company to register with a cashless passenger manifest system.

The company will facilitate the technology for consolidating this system, underlining its operation through digital fare payments.

A super Metro matatu. Image: courtesy (Super Metro X).
A super Metro matatu. Image: courtesy (Super Metro X).

Starting February 1, 2024, the insurer will exclusively issue policies to PSVs with a registered digital payment method, such as M-Pesa, or any other payment gateway.

Direct Line says it has developed a passenger manifest system aimed at verifying third-party claims, enhancing the authentication process for incidents involving injuries or fatalities. This measure is designed to curb fraudulent claims.

During the six months to June 2023, Direct Line incurred underwriting losses totaling Ksh576 million in the insurance of matatus and buses, surpassing the Ksh311 million loss recorded for the entire year concluding in December 2022, according to industry data.

In 2014, financial institutions, including KCB Group through Pepea Card, Co-operative Bank’s M-Nauli, and Equity Bank’s BebaPay, partnered with Google to establish a payment system, competing for a share of the cashless fare business.

Additional cashless payment platforms, such as Abiria (Kenya Bus Service) and Tangaza Pesa PSV card, were introduced.

The cashless system aimed to enable PSV owners to monitor earnings online via a dashboard, facilitating business analysis and helping eliminate cartels and bribery.