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Money Markets

Mobile cash transfers hit record Sh2.8trn on bill payments growth

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Kenyans transacted an average of Sh235 billion in real-time mobile-based payments per month, or Sh7.7 billion a day last year. PHOTO | FILE

Kenyans transacted an average of Sh235 billion in real-time mobile-based payments per month, or Sh7.7 billion a day last year. PHOTO | FILE 

By DAVID HERBLING, hdavid@ke.nationmedia.com

Posted  Thursday, February 25   2016 at  00:00

In Summary

  • Mobile money payments grew to Sh2.8 trillion in the period to December 2015 compared to Sh2.3 trillion a year earlier.
  • Industry experts attributed the double-digit growth of mobile cash to the evolution of the platform beyond peer-to-peer mobile payments to include paying for shopping, utility bills such as school fees, water, rent and electricity.

The volume of cash moved through mobile money transfer platforms grew by a fifth last year to hit a new record as Kenyans increasingly turned to the service to pay for goods and services beyond peer transfers.

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The latest Central Bank of Kenya (CBK) data shows that mobile money payments grew to Sh2.8 trillion in the period to December 2015 compared to Sh2.3 trillion a year earlier. This was a 19 per cent jump.

This means that Kenyans transacted an average of Sh235 billion in real-time mobile-based payments per month, or Sh7.7 billion a day last year – compared to the Sh6.5 billion moved daily in the full year to 2015.

Industry experts attributed the double-digit growth of mobile cash to the evolution of the platform beyond peer-to-peer mobile payments to include paying for shopping, utility bills such as school fees, water, rent and electricity, receiving dividends, and diaspora remittances.

“Aside from the peer-to-peer transfer service, mobile money is becoming the fuel for a growing number of transaction solutions across the payment chain including person-to-business and business-to-business payments,” said Bob Collymore, Safaricom chief executive.

Duncan Otieno, chief executive at MobiKash, said consumers’ growing preference to pay via mobile money coupled with increased acceptance of mobile cash by traders will continue to grow the mobile money volumes.

Kenya has 31.6 million mobile money users who transact across six major platforms — M-Pesa, MobiKash, Airtel Money, Orange Money, Tangaza, and Equitel — backed by a network of 143,946 agents as at December 2015, according to the CBK statistics.

The growth in mobile money volumes comes at a time when all the service providers are battling each other for a piece of the lucrative retail payments market by signing up merchants such as utilities, supermarkets, fuel stations and hotels to accept mobile cash.

These platforms include Safaricom’s Lipa Na M-Pesa, Lipa Sasa Na MobiKash;Airtel Money’s ‘buy goods’ module while Tangaza Pesa is currently piloting MyDuka.

Official data shows that Safaricom’s M-Pesa handles about Sh60 out of every Sh100 transacted on mobile money platforms in Kenya, accounts for 70 per cent of mobile cash subscribers and controls nearly two-thirds of total agents.

The Lipa Na M-Pesa service had 36,400 active merchants in the half-year to September 2015, Safaricom said in a trading update.

Safaricom charges retailers a one-per cent transaction processing fee on the Lipa Na M-Pesa service, which is cheaper compared to the average of three per cent levy banks charge merchants to use their point of sale terminals.

Mr Otieno said Lipa Sasa Na MobiKash had so far signed up 3,500 merchants to the service which allows customers from any of the mobile networks to settle bill payments at a standard Sh15 processing fee.

Kevin Ashley, co-founder and CEO of coffee chain Java House, said M-Pesa now accounts for roughly 20 per cent of total payments behind credit and debit cards (30 per cent) and cash (50 per cent).

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