Local payments switch provider, Kenswitch, has launched a new distribution channel service enabled through use of a Personal Identification Number (PIN) rather than the traditional signature.

Kenswitch general manager George Wainaina said the change would enable its cardholders to purchase goods and services at merchant outlets such as supermarkets, hospitals, fuel filling stations and restaurants without the need for physical cash.

Use of a PIN similar to the one used at its ATMs is expected to enhance security in transactions and minimise fraud cases.

Merchant locations

The use of the card at merchant locations does not attract any additional charges to the cardholder.

Mr Wainaina said the current card holders do not have to acquire new cards. Kenswitch has over 300 ATMS in operation countrywide.

"What we are now offering is a unique value proposition giving convenience to our cardholders," says Mr Wainaina.

Kenya remains largely a cash based society because of poor distribution of payment systems, exposing the economy to huge costs in printing, storage and movement of hard cash.

Outside cash, debit cards are the preferred mode for accessing cash round the clock which is then used to effect payments at retail outlets.

"With this new distribution channel the cardholder has the choice of paying directly, eliminating the need to go to an ATM for cash first," says Mr Wainaina.

Kenswitch was set up by a consortium of banks under the National Payments Systems modernisation and reform process of the Central Bank of Kenya.

Its terms of reference are to allow participating financial institutions to share payment infrastructure like Automated Teller Machines (ATMs) and Point of Sale (POS) terminals so as to avoid duplication.

It has a widespread network with links to 22 member banks all of which are interconnected via Kenswitch.