Mobile payments hit Sh1.3trn mark in first half of year

Mobile money payments continued growing at a faster pace than plastic cards in the first half of this year, underlining the former’s rising popularity.

According to data released by the Central Bank of Kenya (CBK), mobile money payments grow 18.2 per cent year-on-year as at June while card payments increased by 4.2 per cent in the same period.

The value of mobile money stood at Sh1.3 trillion while that of card payments rose to Sh654.7 billion according to the numbers.

“With the mobile space continuing to attract attention both for payment processing and money transfers, we expect continued growth as more products and services are loaded onto the mobile platforms,” said analysts at Nairobi-based Standard Investment Bank (SIB).

The major reason for the increased value was the 21.5 per cent growth in the number of transactions per customer even though the average value (amount) per customer fell by 2.5 per cent to Sh2,551.68.

In an earlier interview, Safaricom general manager for financial services Betty Mwangi said there was still a considerable opportunity for growth in the mobile money business going forward.

“I believe that the mobile money space will continue growing over the coming years. There are new opportunities in government and public transport payments, while our other traditional mobile money propositions such as ‘Lipa na M-Pesa’ also continue registering continued growth,” said Ms Mwangi whose pioneering outfit is the largest player in the business.

Most of the plastic card payments were done through debit cards, which require owners to deposit cash in their bank accounts before settling transactions.

“Within the period, value of debit card payments grew 6.9 per cent year-on-year to account for 98.3 per cent of total card payments made in the first half of 2015 versus 95.7 per cent in same half in 2014,” said SIB analysts.

READ: Kenya's mobile money transfers up 25pc to Sh2,400bn

The largest decline in card payments was in the use of ATMs.

“Within the (half year) period, ATM cards became less popular as number of transactions declined 78 per cent year-on-year and value of payments done through them slumped 77.9 per cent in the same period to account for 0.7 per cent of card payments compared to 3.5 per cent in the first half of last year,” said SIB.

Other analysts also attribute the fall in the value of card payments to the increased popularity of mobile money platforms such as Safaricom’s M-Pesa, and Airtel Money.

“The financial world landscape is shifting focus from traditional plastic card payments to ‘tap-and-pay’ payments.... Many payment services have been integrated into the platform,” said Genghis Capital analyst Mercyline Gatebi in a recent research report.

Credit card payments, which are a miniscule 0.9 per cent of total card payments, grew 33 per cent in the first six months of this year compared to last year’s same period.

“This was assisted by a 19.7 per cent increase in credit card transactions as well as an 11.1 per cent increase in average value per transaction to Sh7,687.98,” said SIB.