At a recent anniversary event at Mang’u High School, one of Kenya’s oldest national schools, three major banks set up booths offering prepaid cards to students and parents. On the surface, it looked like routine marketing. In reality, it reflected a deeper shift in how Kenyan banks are thinking about growth.

Co-operative Bank, Equity Bank, and KCB Group were promoting student prepaid cards positioned as a safer alternative to cash for pocket money. Each card carries an issuance fee, with slight pricing differences that hint at competitive positioning rather than major product variation.

But the real question isn’t about fees. It’s about strategy.

The Business Logic Behind Student Cards

Kenya’s education system serves roughly 15 million students. For banks operating in a highly competitive financial landscape — where mobile money dominates everyday payments — schools represent a concentrated and largely untapped acquisition channel.

The student prepaid card works simply:

• Parents load funds through mobile money, banking apps, or agents.
• Students can only spend what is loaded.
• There is no overdraft risk or direct link to a current account.

Parents receive transaction notifications, can block lost cards, and monitor spending remotely — particularly useful in boarding school environments.

On the surface, the product solves practical problems:

• Reduces the risks of carrying cash
• Limits overspending
• Enables remote top-ups
• Introduces digital payments early

But the long-term value lies beyond pocket money.

A Pipeline Strategy, Not a Fee Strategy

The immediate revenue from prepaid student cards is modest: issuance charges, replacement fees, and small transaction margins.

The larger play is lifecycle acquisition.

A student who begins with a prepaid card could later become:

• A savings account holder
• A student loan customer
• A salary account user
• A long-term borrower

Instead of expensive mass marketing campaigns, banks are embedding themselves at the earliest stage of financial independence.

Schools offer:

• Concentrated customer clusters
• Predictable spending cycles
• Direct engagement opportunities with parents

It’s distribution efficiency disguised as convenience.

Competing With Cash and Mobile Money

Kenya’s payment system is heavily shaped by mobile money. Parents have long relied on instant phone transfers to send pocket money. Meanwhile, cash remains universal and culturally embedded.

Card usage in Kenya remains relatively small compared to mobile transactions. So why introduce student cards now?

Cards fill gaps mobile wallets cannot:

• Online payments
• Merchant POS terminals
• Integration with global payment networks

Banks are betting that as schools digitize further, prepaid cards can complement — not replace — mobile money.

However, the biggest competitor is habit.

Cash requires no issuance fee. Mobile transfers require no physical card. And many Kenyan schools restrict student phone usage, which creates both a challenge and an opportunity for prepaid cards.

Friction Will Decide Adoption

The success of student prepaid cards will depend less on marketing and more on user experience.

Parents care about:

• Fast issuance
• Instant balance updates
• Reliable transaction alerts
• Minimal hidden fees

Even small failures at checkout could push families back to cash or informal alternatives.

There is also a cultural factor. Pocket money has traditionally been a private agreement between parent and child. A prepaid card introduces structure and tracking — something some families will welcome, while others may resist.

Schools as Financial Gateways

From a scaling perspective, schools are powerful distribution channels. They aggregate thousands of families in one location and create repeat, predictable transactions.

If adoption grows, prepaid cards could expand into broader student ecosystems:

• School fee payments
• Transport payments
• Identity verification
• Digital learning tools

However, expansion will require infrastructure. Not all schools have card terminals. Not all families are banked. Urban models may not translate easily into rural environments.

The Bigger Picture

The product itself is not revolutionary technology. Its significance lies in positioning.

Kenyan banks are attempting to insert themselves into a financial journey that was once dominated by cash — and later by mobile wallets.

If they deliver reliability, security, and everyday value, prepaid student cards could become an entry point into long-term banking relationships.

If not, they may remain a niche solution used mainly during school terms.

Either way, the presence of competing banks in a school compound signals something important: the next battleground for customer acquisition may begin far earlier than we think.