Mobile payments and water dispensing – a useful combination in Kenya

Monday 10 October 2016 | 14:02 CET | Background

Where people have been using ATMs or bank machines in many countries for many years to access cash, Kenya started providing similar machines in 2015 in the slums of its capital Nairobi, but not for people to access cash, but to access clean water. The water ATM system had been used in rural areas before in Kenya, but not yet in urban areas. The possible useful combination of water dispensing and mobile payments had already been shown/determined by the GSMA in their 2014 report ‘The synergies between mobile, energy and water access: Africa’.

The new ATM system drastically reduced the cost of clean water and so helped improve the health of its residents. Customers needed a smart card to pay for the water, topping up the smart card at a kiosk or through their mobile phone.

Adding mobile payment simplified the payment process

The newly introduced water ATM in Nairobi combines Grundfos’ AQtap, a water ATM, with Ericsson’s M-commerce Interconnect, a global hub for mobile payment services.  Expanding the smart card payment option to mobile payment gives consumers not simply another method of payment. In a country with a high level of mobile payment usage, it provides the Kenyan consumer with the easiness of using an already commonly used method of payment instead of having to buy a smart card for one particular usage. The solution provided by Ericsson allows any mobile wallet services from any service provider to be used as method of payment, avoiding the need for water service providers to integrate all the separate mobile payment schemes on offer into their payment system.

According to Ericsson the revenue collection plays an important part in securing reliable access to drinking water, as water supply points have been known to fail due to lack of funds, and capacity for operations and maintenance.

According to the Afrobarometer from January 2016 more Africans have access to mobile phone service than to piped water or sewage facilities. The provision of ATM water dispensers is therefore a much needed service. Enabling consumers to pay for their water at reduced rates while using their much used mobile payment service, combines two useful services for many Africans. Grundfos and Ericsson hope that this new solution can contribute to the financing of water in other countries too.

In another project which combined water access and mobile payments, Safe water Network stated that approaches relying on capital recovery for water kiosks are generally unrealistic in communities with populations of fewer than 5,000 persons if prices are to remain affordable. 25 Kiosks implemented by Grundfos Lifelink in Kenya and Uganda, and Safe water Network in Kenya and Ghana, leverage mobile technologies in order to improve operations and optimise services. In the case of Grundfos Lifelink, each site is equipped with a series of sensors coupled to a GSM meter that is able to transmit information in real time about the water availability and customer payments.

Combining utility and mobile payment beneficial for consumers and country as a whole

The combination of mobile payments and utility is not new, as in 2012 already home solar installations were combined with mobile payments in various countries in Africa, based on M2M connectivity. The Water and Sanitation Program from the World Bank showed in a 2012 multi-country survey of mobile-based utilities payments in Africa that nearly 100 percent of respondents in Kenya reported time savings as a key motivation for switching to M-Pesa to pay their bills, and more than 60 percent said cost savings were also a factor. This project provided water sold through piped household connections and was dubbed Maji Mashinani, Swahili for “water at the grassroots”.  Since the project began, more than 18 kilometers of water pipes and over 2,000 shared connections have been installed inside Kayole Soweto in Nairobi. However, without access to a specially designed loan product from K-Rep Bank, many households there would be unable to take advantage of this network, due to the high connection fee. With a loan from K-Rep, households were able to finance the cost of this connection over a three year period. Loan repayments are currently in the process of being incorporated into the household’s monthly water bill, which is paid using M-Pesa. Customers can also check their water bills via SMS, allowing them to better manage their water usage.

With clean water being paramount to people’s health, integrating mobile money into these initiatives of piped connections and water dispensers the reach of these projects and has been extended and it has led to a higher use of clean water, in turn benefitting both the consumers involved and the country as a whole.

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