Average mobile-based deals decline signals surge in retail uptake

The average size of mobile-based financial transactions declined 12.5 per cent in the first three months of the year indicating increased uptake at the retail level.

In the period under review the average transaction was Sh2,251 down from Sh2,574 last year, data from the Central Bank of Kenya (CBK) shows.

The drop follows a sharp increase- 43 per cent- in the number of people using mobile phones for financial deals to 36.6 million in March from 25.6 million a year earlier.

The CBK report shows 344 million transactions worth Sh774.4 billion were conducted using mobile phones in the three months to March compared to 252.7 million deals of Sh650.5 billion in a similar period last year.

This follows the entry of commercial banks in mobile transactions dominated by M-Pesa, offered by Safaricom, widening reach of the platform.

Some of the new entrants include Equitel, a product of Equity Bank and KCB M-Pesa, a partnership between the largest lender by asset base in the country and giant telecom Safaricom.

Other players include yuCash, Airtel Money, MobiKash, Tangaza Pesa and Orange Money “We had issued 1.7 million Equitel SIM cards as at end of December with 90 per cent of them being used for banking,” said Equity Bank’s chief executive James Mwangi during a recent investor briefing.

Banks have been offering loans through mobile phones encouraging the use of the same channel to settle payments.

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

KCB processed 3,527,074 loan applications made through phones last year up from 150,531 the previous year.

Equity Bank said its average loan size for cash repayable in a month was Sh7,000, Sh40,000 for three-month credit and Sh120,000 for one year debt.

Mobile money agents increased to 150,987 by the end of March from 128,591 in the same period last year.

The value of cash transacted daily through mobile phones has risen to Sh8.6 billion from Sh7.2 billion last year and Sh4.6 billion three years ago.

M-Pesa remains the key player in mobile money transfer with data from the Communications Authority indicating Sh267 billion was transacted through the platform in the last quarter of 2015 when a total Sh290 billion was transferred.

Equitel transferred Sh17 billion while Airtel moved Sh4.3 billion.

The convenience in use of mobile money and increased adoption by individuals and companies has been cited as one of the reasons behind slow uptake of card payment in the country.