Chip technology set to transform face of transactions in Kenyan banks

By MARGARET KANINI

Kenya’s banked population will soon begin to use chip and pin cards, which are expected to minimise incidences of credit and debit card fraud. The global standard the country’s banks will use is Europay, Mastercard, Visa (EMV).

Jabu Basopo is the Visa manager for Southern and East Africa, and is a crucial stakeholder in the process. He talks to us about how he expects the EMV migration to change the face of transactions in Kenya.

How do you describe yourself?

As the face of Visa Card in the Southern and Eastern Africa.

I am also a Zimbabwean by birth and in my mid-40s. I hold an MBA qualification specialising in strategic management and marketing from the University of Natal, South Africa.

What does your job entail?

I am responsible for directing and driving strategy and providing leadership to the Visa team in East and Southern Africa. I also manage Visa’s relationship with stakeholders, including financial institutions, regulators, policymakers and merchants.

What do you think of various African countries’ move towards EMV certification?

The decision itself is a great achievement for Africa. Africa has decided to move a step ahead to provide enhanced financial services to its citizens. We are on the right track. Europe migrated fully to EMV almost two years ago, so should Africa.

How long do you think it will take Kenya to migrate?

Migration to EMV is a journey that most of us should be patient with. Distribution of the cards to consumers is also a very long process that may take up to three years to finalise.

A lot of co-ordination is required, but Visa anticipates that by the end of next month, 80 per cent of all the commercial banks in Kenya will have migrated.

How difficult is it to fraudulently duplicate, or skim, a chip card?

The migration to EMV guarantees security by enabling safer, smarter and more secure transactions across cards, contactless, mobile and remote payment channels.

When a consumer uses an EMV-enabled card to pay for goods or services at an EMV terminal, it can be instantly identified as an authentic, approved payment instrument belonging to that consumer through a process called dynamic authentication.

When used with a PIN [Personal Identification Number], the chip verifies that the consumer is indeed holding his or her own card, a key factor in reducing incidences of credit or debit card fraud.

The migration to EMV is intended to make customers can feel safer carrying out transactions using plastic money. It will also save the banking sector billions of shillings lost through fraud, as well as reduce the costs Central Bank incurs printing and transporting paper currency.

How is Visa helping Kenyan banks acquire EMV certification?

The entire process begins with the banks preparing their systems for the new move.

On our part as Visa, we are working with the Kenyan banks that are our partners and are helping them get EMV-adoptable systems.

The procurement of the plastic materials for the cards, as you know, is not the responsibility of Visa, but we are working closely with vendors to ensure the plastic materials comply with EMV standards.

We are also helping Kenyans improve on the infrastructure that would encourage people to use electronic cards for the services. We know that if people have no infrastructure that ensures security and seamless transactions, they will resort to other payment systems.

Why electronic payments over cash?

There is something financial experts and economists call money multiplicity effects.

When money is kept in banks and people use electronic cards to withdraw and pay bills, it generates more deposits that can be lent on to customers, leading to a more productive economy.

bizbeat@standardmedia.co.ke