In an effort to revive e-commerce in Kenya, i360 Microsystems, in partnership with the Commercial Bank of Africa, has developed an online payment gateway that will allow money transfers by mobile phone.

The gateway will be powered by M-PESA, a Safaricom service that enables money to be sent via phone or withdrawn from agents around the country after loading funds onto a SIM (Subscriber Identity Module) card.

M-PESA technology has covered more people than banks have over the years, said i360 Managing Director Per Erick Mulamba. It can operate like a credit card and will eliminate the problem of queuing to pay for utilities, he added.

Currently, Kenyans cannot access online payment gateways because of legal technicalities. A Kenyan can not open an account on PayPal, for example.

Using Delphi and MySQL, however, i360 has developed software that synchronizes the payment systems of utility companies and makes it easier for people, especially those with limited technical knowledge, to access the service.

"Every online business needs and can benefit from having outstanding merchant services. We have developed innovative and practical ways to cut the time spent paying utilities," Mulamba said. "This will reduce queues at the Kenya Revenue Authority when people are paying their annual tax or Value Added Tax."

To make a transaction, people will be required to visit the company Web site, purchase or pay for services, and enter their phone number and payment amount. The money will then be transferred to a number assigned to the bank and from Safaricom to the bank.

Because the software is synchronized with the utility or government institution receiving the money, the user will be able to immediately determine whether a transaction has gone through.

The new service will serve all Kenyans, from those spending as little as 30 Kenyan shillings (US$0.46) to those spending 30,000 shillings, said Bill Kagai, CEO of MediaCorp, a local information vending company.

"We should commend Commercial Bank of Africa for accepting to partner with i360 Microsystems. The bank will do settlement, a role Safaricom can not perform," he said. "Only banks are licensed to do settlement."

However, the online gateway faces a major challenge in the lack of an ICT act to govern electronic transactions in case of disputes. The ICT and e-transaction bills are still pending in Parliament.

Intellectual property is another challenge identified by Mulamba, where software developers who work for a company realize they can offer similar services.

"Safeguarding intellectual property is a challenge; people thrive on stealing other people's ideas and that is why there is a high turnover of software developers in many companies," said Mulamba. "One is forced to work with a smaller team of trusted people and take a longer time, instead of a larger team that would have taken a shorter time to complete the project."