ATM use spreads amid rising mobile money transactions

When the first automated teller machine (ATM) was introduced in the country in the 1980’s, the focus was on wealthy individuals.

However, over time, this has changed as banks have increased their reach countrywide.

Data from the Central Bank of Kenya shows that the use of ATMs seems to be slowing as the use of other avenues such as point-of-sale and mobile money transactions rises.

The value of ATM transactions rose to Sh114.61 billion in the first nine months of this year from Sh102 billion over the same period in 2011, a 12.37 per cent growth.

“The usage of ATMs will continue to rise in the short run, with an expected stagnation at some stage as direct electronic transfers become more popular,” said George Nyamao, KCB Group senior manager for ATM services.

Mr Nyamao said that Kenya is still a heavy cash society and therefore ATM use will not entirely be eliminated as the infrastructure owners, mainly banks and other shared service providers introduce more value-add services.

As at the end of September, there were 2,311 ATMs while the number of ATM cards stood at 1.47 million compared to 2,217 ATMs and 1.35 million cards as at September 2010.

Mr George Wainaina, the MD of shared payments platform provider Kenswitch, said that the banking regulator was working with providers to make the service more efficient and cost-effective.

“Towards this end, industry stakeholders have provided their views for the need for interoperability by ensuring existing player’s systems are able to talk to one another,” he said.

Mr Habil Olaka, the Kenya Bankers Association CEO said that ATMs will always have a place as long as there is a need to conduct cash transactions, adding that it will take time for Kenya’s economy to move to a cash-lite economy.