It is a myth that online credit card payments are not available in Kenya.
Paypal
What is true is that Paypal does not accept payments to Kenyan bank accounts. It is however possible to use Paypal to buy things online using a credit card issued in Kenya.
Services similar to Paypal
There are several over seas online payment solutions similar to Paypal and most of them offer solutions that are as easy to use as Paypal. Two common ones are:
- 2CheckOut offers credit card payments at a transaction fee of 5.5% + 0.25USD per transaction. Quite expensive and it is not allowed to sell any travel related services such as flights, safaris or accommodation. Set up fee is 49USD. Only option for withdrawal to a Kenyan bank account is via bank wire transfer at a cost of 10USD.
- AlertPay offers credit card payments at a transaction fee of 4.9%. It allows almost any kind of goods and service to be sold. No setup fee. Only option for withdrawal to a Kenyan bank account is via bank wire transfer at a cost of 10USD. You must send proof of company registration in order to get started.
Kenyan Banks
Kenyan Banks are now starting offering online merchant accounts as an account needed for credit card payments is called. Prices are quite high with set up fees around 2,500USD and monthly fees around 200USD plus the usual transaction fee at 5%.
As everything in Kenya this is negotiable though. A bank offering this service is I&M. Please let us know if you know any others.
The main advantage of having your own merchant account for online transactions is that each payment will go directly into your bank account. When using a service such as Paypal you withdraw money from your Paypal account into your bank account.
Generally this solution should also be cheaper than going via a Paypal like service, at least with high sale volumes, but this does not seem to be the case in Kenya yet.
Made In Kenya
There are also two new solutions that use M-Pesa as a virtual wallet. The downside to this is that instead of just entering an M-Pesa code to pay for something on your website the visitor needs to open an account with an external website, top up their account on that website and then make the payment on your website. It is a procedure that will probably make some of your potential buyers go away.
- PesaPal offers payments both via MPesa and Zap. Credit cards are planned for the future. You withdraw money into your bank account. Website uses encryption.
- Monyamickle offers MPesa only. Buyers top up their account via MPesa Pay Bill. Credit topped up is non-refundable. Website is does not use encryption.
Travel Agents, Hotels and Safari Companies
There is a specific solution targeting the African travel industry called EnoyaOne. They offer three payment solutions:
- Book offline (phone, email) – pay online with credit card. More or less sending an electronic invoice payable by credit card that ends up in your bank account.
- Online Booking System. Custom booking system with integrated online credit card payment.
- Online Credit Card Payment. Standard online credit card payment.
They also offer other booking systems. Set up fee is 1500USD per website and transaction fee is 4.7%. For members of KATO set up fee is 300USD.
Comments
WTF!!!! Why are Kenyan banks like I&M charging exorbitant rates to “open” a merchant account? Screw it!! $2500?? What are these people smoking?
All ZAP or M-PESA needs to do now is integrate their technology into popular eCommerce shopping cart systems like Cube Cart, OS Commerce, OpenCart, ZenCart, Magento et al. After that’s done, the banks can go to hell — forever.
- Max (aka Max “The IT pro”)
If Zap and M-Pesa would provide an API it would be easy to integrate into any of the above shopping cart solutions.
You can still integrate PesaPal or MonyaMickle though :)
If you would like to sell online using the I&M system but cannot afford the set up fee go here www.thekenyashop.com and contact them.
That’s what I have been dreaming about whereby I do not need to go to a bank to do transfers, withdrawals or deposits. I want a service that can help me when am on the road. Many things go wrong sometimes and I need to feel secure, money-wisely, so that problems are solved with quick efficiency.
MPESA walk the walk and do the Talk…..
It is just unfortunate and sad that we can not use the popular paypal accounts to withdraw money through our local banks accounts. I believe my favorite bank, equity will be coming up with a solution.