Kenya’s Mobile Money Payments on the Rise as Card Transactions Get Less Popular

Mobile money

Mobile moneyKenya’s uptake of mobile money services and its associated transactions continue to see a healthy growth thanks to new data that has been made public by the Central Bank of Kenya, CBK.

Starting from January to November 2017, mobile money transaction registered a growth of KES 267.52 billion compared to the same period in the preceding year, 2016. On the whole, this segment was marked by mobile payments valued at KES 3.31 trillion, which is a 8.8 percent jump.

It should be noted, however, that mobile cash transfers were particularly affected in November 2017. The month transacted 298.96 billion, a marginal drop from KES 299.02 billion that was transacted in November 2016. It has been predicated that NASA’s #Resist campaign, which called for its supports to skip the use of certain services, including M-PESA, was the primary reason for this trend.

It is obvious that Safaricom’s M-PESA controls the lion’s share of this segment, with operations that constitute up to three quarters of mobile money services.

Part of this growth has also been credited to extras in ecommerce services. Specifically, 2017 saw the launch of key mobile commerce services, including Safaricom’s Masoko that leverages its robust network of payment options, as well local large-scale retailers such as Naivas. Existing ecommerce platforms have also upped their game with vigorous campaigns across multiple media platforms in a bid to net more users whom they hope to convert to loyal customers. As a result, mobile commerce saw a huge jump, marked by 60% YoY compared to person to person transactions that rose by 14.7% according to Kenya’s ICT regulator, the Communications Authority’s (CA) report for the first quarter of the 2017/2018 financial year.

Another notable point from CBK’s data is a notable drop in card payments, which, obviously, are not the most preferred platform for payments in a demographic that favours mobile payment channels that have exceled in cementing their trade in the last couple of years. This is evidenced by a drop in card-related trasnactions from KES 1.045 trillion in 2016 to KES 1.035 trillion for the period under review.

It is apparent that the ease of mobile payments, in addition to less processes during adoption has contributed to their growth. The popularity of fintech services, including those that offer mobile loans (at higher interest rates than conventional systems because of the risks involved) have also encouraged the ballooning of mobile payments.