Jeffrey Gettleman of The New York Times reported today that “Transit Cards to Replace Cash on Kenyan Minibuses are a Hard Sell.”
Google is trying to introduce the BebaPaycard, a card “that will replace cash payments and track every transaction on the minibuses, making it much harder to bribe police officers and much easier for the government to capture millions of dollars in taxes.”
For the government, “The plan was to digitally monitor all matatu activity, eliminate robberies and take away the incentive to drive recklessly. (Without cash, the matatu drivers and conductors would be switched to regular monthly paychecks.) The government was eager to rake in taxes from an industry with an estimated $2 billion turnover, though since most of it is done in worn-out bills, no one really knows.”
It seems that Google and the government were too focused on how the cards benefited them. Google claimed that the only requirement for users of this card was that they open Gmail accounts. For Google, these cards would create a method of tracking the movements of people throughout the city. For the government, the cards would enable them to monitor what their citizens and matatu drivers were doing. Furthermore, they could finally tally how large the matatu market was and tax it.
Despite a government mandate for all matatu (minibus) drivers to accept these cards instead of cash, the matatu drivers are slow to accept the change. Perhaps it’s because the matatu drivers have little incentive to do so. Let’s see, if I adopt these cards, then the government will know how much I make and insist that I pay taxes on that income. Beyond the natural desire not to be monitored nor to pay taxes, perhaps the matatu drivers simply prefer cash.
My Ghanaian Experience
While I have minimal experience living in Kenya, I believe my experience in Ghana is similar enough to weigh in. The average Ghanaian also gets around town via minibus (tro tro). These vehicles also are not heavily regulated. (Basically, foreigners are barred from entering the sector unless they import more than 20 new vehicles.) Ghanaians pay between $0.25 and $3 to get most anywhere around town.
I also do not think such a card would work in Ghana in its current form. Ghanaians prefer using cash. Many many companies have tried introducing cashless payment systems, e.g. MTN Money, Airtel Money, e-Zwich, Text-n-Pay. All of these systems are at the fringes. Visa credit cards only work at a premium hotels, restaurants, and supermarkets. (MasterCard lacks a presence.)
People also prefer cash to checks for a couple of reasons. First, most banks give check writers an ability to veto a check when the recipient is trying to cash it. When you sign up for a checking account, the bank offers to call you any time someone tries to cash a check over a predefined amount. Thus, you might have exchanged goods for the check; only at the bank would you learn whether the check could be cashed. Second, checks take a long time to clear (2 weeks) and, I believe, checks can only be cashed at specific branches. Third, it isn’t always clear if people will have the money in their accounts. While checks are supposed to save people time, they actually consume a lot of time and do not provide the certainty that cash does.
Past governments have been anti-rich and anti-intelligentsia so Ghanaians are not known for flashing their wealth. Fortunately, for many Ghanaians, Ghana has yet to catch up to the digital age. Unlike London, there is no constant CCTV feed for everyone who enters Accra. Government offices and agencies still rely on paper records.
Today, The Daily Graphic reported that they recently discovered 2,800 “ghost workers” on Ghana’s government payrolls. These nonexistent people have been receiving checks from the government at a cost of GHC 36.7 billion or $10.5 billion. This is an enormous sum for a country whose GDP is approximately $41 billion.
The government lacks the tools to enforce tax collection, weeding out corruption, and compliance with codes and regulations. It’s hard to imagine a people who have privacy and a plethora of freedom to opt into a system that allows for greater government monitoring.
Lastly, I think Gettleman seems to suggest that since the average Kenyan earns $5 per day, she would be interested in replacing her cash with the convenience of a card. While the average per capita income may be $5 per day, those who take matatu are probably making far less. Similarly, those who drive and work on the matatu probably make less than the quoted figure.
In Ghana, on average, each person makes $11 (40 cedis) per day. I’m going to assume that a normal working class makes far less than $11 (maybe 15 cedis) per day but on average a working class Ghanaian makes more than an average working class Kenyan. Working class Ghanaians have lots of financial responsibilities to their families and extended families — and don’t have credit cards to carry them over when they are cash-strapped. Most Ghanaians seem to be living day-to-day or paycheck-to-paycheck. Asking matatu drivers to forgo the certainty of cash every day for the promise of payment at the end of the month may be too difficult and uncertain for them to bear. Furthermore, most Ghanaians do not trust their governments to not spend a pile of their money. Experience has taught them that their “leaders” aren’t accountable.
Ghana is not Kenya but the two seem to be in similar stages of development. Cash remains king because it is contains certain value, it does not rely on the honesty of government, and it offers the spender anonymity. I recognize that Google is seeking a way to translate everyday interactions into data; I recognize that African governments want to tax the informal sector. Applying developed world solutions to problems in the developing world requires a better understanding the day-to-day conditions of how the target users live.