We have all felt the immediate shock of key payment utilities going offline, whether as a consequence of ad-hoc system issues or scheduled maintenance runs that are often announced beforehand. The inconvenience that is experienced when these payment systems skip a beat slowly gnaws on the gains made with digital money and continues to support the currently entrenched place of cash.

Even when Safaricom’s cash-cow M-Pesa sneezes, much to the chagrin of many who get stuck at various points of purchase.

We must appreciate that no platform or system is infallible. Outside of cash and the ‘yet to scale distribution-wise’ cryptocurrency, the other option is plastic. Here, unknown to many Kenyan’s the two main financial services companies that issue plastic and other virtual payment instruments – Mastercard and Visa, both suffered outages at scale in 2018.

First was VISA, on the first of June 2018 with an outage that lasted 10 hours and affected over 2 million transactions, followed only weeks later by Mastercard on 12th July 2018.

Protecting against payment system outages

With this visibility, I would like to share a thought, as incomplete as it comes to what could be a silver bullet to buffer consumers against crippling future outages.

The Central Bank of Kenya has under its mandate, to ensure safe and efficient payment and settlement systems in support of an efficient financial sector, so logically this solution would sit here, whether manifest as a direct service offering or fully owned subsidiary.

Borrowing from the M-Pesa model, where all user funds are held in trust and are at all times the property of their respective owners, the CBK should create a similar vehicle with the additional feature of carrying a daily interest benefit on any amounts. Unlike mainstream banks, this service would not carry out any traditional lending nor engage the retail and commercial side of money trade but instead only play in the interbank lending space. The interest may be insignificantly divided against a large pool of ‘account holders’ who are identified by the same KYC as banks and mobile money platforms collect – the National ID or Passport.

The secret sauce would lie in the opening up of this pooled digital vault by the CBK to the rest of the licensed financial services fraternity via application programming interfaces for them to build channels both in and out and thereafter layer services atop.

This would change the game somewhat as it now boils down to service innovation, user experiences and business models of those invested in the space.

With multiple ways of accessing one’s funds coupled with links to service bouquets but from different financial service providers, suddenly the risk to the economy is reduced by several factors and consumers freed from the anxiety of having only one rail through which to access their funds and employ them for various disparate uses.

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