What you need to know:
- The five wanted General Motors East Africa, the largest motor dealer in passenger vehicles in the country, to link them with some of its biggest clients in the matatu business in order to put their idea to test.
- Given that big banks, telcoms and other technology firms were battling to get a share of the billions of shillings in the matatu industry, the five techprenuers thought it wise to ride on the experience of established public service transport companies.
- The story of My1963 by Fiber Space is, however, more of an afterthought than design; it is a classic case of opportunity meeting the prepared. The original idea by the team was to develop a cashless payment system modelled for use in hospitals.
Early last year, a group of five entrepreneurs approached General Motors East Africa’s boss Rita Kavashe armed with an idea that was to see them dip their hands into Kenya’s lucrative matatu industry.
The push to cashless fare payment was at its peak then, largely driven by the Transport ministry through the National Transport and Safety Authority as one of the ways of bringing sanity in the industry.
A digital fare collection system, the authority said, would help check fraud by matatu crew as the vehicle owners could track payments real time.
The five — Joan Irungu, Grace Mbugua, Dennis Omito, Macharia Mochugu and Mwakio Ngale — wanted General Motors East Africa, the largest motor dealer in passenger vehicles in the country, to link them with some of its biggest clients in the matatu business in order to put their idea to test.
OPPORTUNITY MEETS PREPAREDNESS
“We were introduced to Mr Simon Kimutai to whom we sold our idea and he allowed us to use 15 buses to test run our cashless fare payment system,” team leader Mr Ngale said in interview.
Given that big banks, telcoms and other technology firms were battling to get a share of the billions of shillings in the matatu industry, the five techprenuers thought it wise to ride on the experience of established public service transport companies.
“To us, the industry was too big to be run by just a few companies, and that is how we started,” said Mr Ngale, who leads the team that was to later form Fiber Space Limited.
They named their cashless payment card My1963 whose ultimate intention, according to them, was to invoke the sense of patriotism associated with the year Kenya got independence.
The story of My1963 by Fiber Space is, however, more of an afterthought than design; it is a classic case of opportunity meeting the prepared. The original idea by the team was to develop a cashless payment system modelled for use in hospitals.
The team were working with one of the country’s biggest hospital when an opportunity that has now seen them get a share of matatu billions came calling.
“The initial plan was not actually My1963. We just changed the card to suit the matatu industry and so far, it has worked,” said Mr Ngale.
When the team was introduced to the chairman of Matatu Owners Association, Mr Kimutai, they had committed a paltry Sh26,000 in acquiring 10 cashless payment cards and one point of sale terminal. So, with a single mini bus ferrying about 42 passengers per trip, the 15 buses they had been assigned to test run their business model by Mr Kimutai were already overwhelming.
My1963, just like its rival commuter cards, comes with contactless payment technology where a commuter uses his or her mobile phone or point of sale gadget to pay fare. The system uses Near Field Communication.
And from the initial 10 cards, Fiber Space claims to have about 180,000 cashless fare payment cards in the market at the moment, serving about 7,400 matatus across the country.
“When the first 10 cards worked and we confirmed the owners of the matatus had received money, we had no reason not increase the system’s capacity,” Fiber Space head of merchants Joan Irungu noted.
Mrs Irungu, Ms Grace Mbugua — Fiber Space’s back end specialist — and Mr Ngale used to work together at outsourcing and consulting firm Verve K O Ltd.
The other members, Mr Dennis Omito — who is the database and financial head — and Mr Mochugu Macharia, an applications developer, were brought on board upon the establishment of Fibber Space.
My1963 has since partnered with Safaricom’s M-Pesa to allow users top up their cards through Lipa na M-Pesa which has increased their market penetration significantly, says Mr Ngale.
“Without the arrangement, we could still be relying on terminals to top up the cards meaning the user had to be in contact with our staff so as to load cash in the card which is very limiting,” he explains.
To endear more to matatu owners, Fiber Space has also partnered with oil marketer Engen to allow vehicles fuel and pay for the gas electronically.
There is no stopping for Fiber Space, who have a target of issuing one million cashless fare payment cards by the end of the year as well as expanding the product portfolio to reap the benefits of technology.
The ambitious team is targeting to launch three major products targeting digital television, government payment and one tailored for the health sector before the close of this year.
“Our fee is three per cent fixed charge on all transactions, which is a modest charge considering we intend to break even by 2018,” said Mr Ngale.