Ninety percent of transactions in Kenya are cash-based, and that provides a substantial opportunity for mobile payments.

According to Business Day, a new mobile merchant payment system in the African nation is helping move the country toward a cashless economy, which is expected to increase retail sales and reduce the costs of printing currency notes.

The service, known as Lipa Na M-Pesa, which is directly translated from Kiswahili as "Pay With M-Pesa," was launched a month ago by Kenya's largest mobile services provider, Safaricom. It builds on Safaricom's mobile money system, which is known as M-Pesa, the site said, and has been replicated in South Africa, India, Afghanistan and Tanzania by its majority shareholder, Vodacom.

According to estimates, nearly half of the Kenya's 40 million citizens use M-Pesa. And M-Pesa has also become the preferred mode of money transfer in the country, Business Day said.

Learn more about mobile payments trends.