Payment Gateways: Catalyst for Economic Boom in Kenya

According to Wikipedia a Payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. Payment gateways such as Pesapal, JamboPay, I pay, Paygate are one of the critical enablers of financial inclusion in Kenya and Africa at large.

Cognizant of the many limitations associated with payment gateways such as high transaction costs, trust and usability issues; they still are playing a critical role in the economy by enabling easy and convenient payment by customers and increased efficiency for businesses. Moving forward; and in light of the enabling responsibilities they play in the economy; these players must not view themselves as technology or financial services companies but as operating systems for the booming digital commerce in Kenya.

With this in mind payment gateways would need to restructure their operations from functional to customer focused in order for them to best serve the challenges faced by customers and its merchants.

For merchants, payment gateways need to be more than just a website button but must evolve their technology platform to enable sellers to have more-intimate relationships with customers using mobile and software. Similarly for consumers, there is a need to create capabilities that would allow underserved Kenyans in all counties to manage and move their money in a more secure, faster, easier, and less expensive manner.

Finally within the two segments of Merchants and Customers, payment gateway companies will be able to develop highly customized products that target different markets .For examples currently all merchants are bundled into one group which entails any business or government entity.

Under the new strategy, merchants in various sectors have different needs hence can be subdivided into their respective market sector. Sectors may include; Traders located in Gikomba Market,Marikiti Market,Toy Market (Based on transaction history payment gateways can develop loyalty by offering working capital support), Retailers dealing in fast moving goods (Payment gateway can provide customer habit and trend data)  etc.

Similarly for Customers; Payment product targeting millennial market who want to pay for a concert, movie and have a social experience; not feel like just another transaction etc, Commercial clients who would want to purchase in bulk or frequently and be furnished with statements for audit purposes, Middle working class etc.  Care needs to be taken to ensure the needs of each segments are met as much as possible to ensure each product is successful.