Mobile phone cash transfers rise to Sh5.2 billion per day

Kenyans transferred Sh1.9 trillion on their mobile phones last year, or an equivalent of Sh5.2 billion every day, a new report by the Central Bank of Kenya (CBK) has shown.

CBK data released Thursday shows there were 732 million mobile phone transactions last year, which has replaced most transactions that were previously done in cash.

As at September last year the number of users subscribed on mobile money services was 25.1 million, far more than account holders in commercial banks.

Mobile money has become a key revenue stream for the telecommunication companies with market leader Safaricom reporting Sh12.5 billion income from M-Pesa in the six months to September last year.

The telco charges commission on a graduated scale depending on the sum being transferred or withdrawn with the least charge being Sh3 for transactions less than Sh50.

The number of agents contracted by telecommunication firms offering mobile money services increased by 33,218 last year to stand at 113,130.

A recent survey conducted by Kenya Bankers Association showed that 60 per cent of people use their mobile phones for financial services, signalling the growing reach of the money transfer and bill payment services that began with the September 2007 launch of Safaricom’s M-Pesa platform.

Central Bank data also showed increased use of cards in the country with the total value transacted being Sh1.4 trillion in 11 months to November up from Sh907 billion over a similar period in 2012.

The survey by the Kenya Bankers showed that most of the money in circulation was withdrawn from banks using ATM cards.

Fifty-eight per cent of withdrawals occur at the ATMs compared to 20 and 16 per cent which takes place at the mobile operator agent and at the banking teller, respectively.

Policy changes in the matatu industry banning the use of cash to pay fare beginning July are expected to entrench the use of mobile money and plastic cards in the country.

Safaricom has already registered over 1,300 matatus and taxis in its Lipa na M-Pesa platform as its seeks to lock-in public transport vehicles to its M-Pesa mobile phone payments service ahead of the July ban.

Equity Bank launched the BebaPay prepaid card last year in partnership with Google.

The British High Commission in the country cancelled use of cash payments for travel visas on Monday, entrenching the use of cards.

Banks are trying to get a piece of the pie in the mobile money business by launching products that interlink their services with those of telecoms with the promise of accessing quick credit.