You could no longer pay through your Visa credit card when ordering rides from Uber or food from Uber Eats in Kenya. Here’s the scoop.
Farewell, Visa
Uber has obviously been partnered with Visa as credit card payments are relatively among the most convenient ways to pay. However, Uber Kenya has stopped accepting payments through Visa, citing a significant jump in costs. This method of payment is renowned for business travelers and expatriates in Kenya, touted as the largest market for ridesharing in East Africa. This took effect in this January month.
“Payment costs globally are on the rise, which impacts businesses and their consumers,” an Uber spokesperson told Ridesharing Forum. “We regularly review our payment methods on a market-by-market basis to ensure we’re keeping costs reasonable while balancing any potential impact on consumer experience. We’ve taken this step as a result of this review process.”
Implications
This decision by Uber Kenya highlights a profound shift in how global platforms adapt to African payment processing economics. As you may well know, even businesses handling credit card payments need to shoulder some costs.
As cross-border credit card fees rise and local payments are more demanded, Uber is seeking to reduce costs by narrowing its payment stack only to methods that settle locally and cheaply.
In Kenya, where mobile money is gaining in popularity, this means putting digital wallets and cash in priority, whilst pushing international card schemes to the outskirts.
Complete detour
This decision to completely axe Visa payments for Uber Kenya is a reversal from Uber’s first years in Nairobi, where credit card payments meant trust and safety in a city that heavily relies upon cash. But, economics shift.
Nowadays, each time Visa cards are used, foreign exchange spreads, interchange fees and scheme are charged to Visa, and more.
It also impacts global interest rates that remain high, as well as currencies that remain volatile. Unlike local wallets, credit cards or debit cards won’t clear instantly and there are hefty cross-border costs.
The solution
Kenya’s authorities think of working solutions, such as mobile money services. Today, Uber Kenya is integrated with them, allowing direct debits from riders and near-instant payouts to drivers. This reduces chargebacks and pending disputes usual with cards. Mobile money also works with retail and utilities, aside from just transport. Billions of dollars are moved through mobile money in Kenya in the past year, the Central Bank of Kenya stipulated.
Effects
Yet, not every party agrees with the decision. Some say that the removal of this payment method creates friction for institutions like corporate riders and rides that rely on credit, rewards, and corporate expense claims. While cash and mobile wallets are alright, they don’t fit company travel policies.
However, interestingly enough, payments through Mastercard are still accepted. Mastercard and Visa are two of the biggest credit card platforms globally. For more ridesharing and delivery news, keep browsing this site, or sign up for your account here on Ridesharing Forum.