The volume of cash moving through mobile money transfer platforms grew by a fifth in the first six months of this year, powered by increased uptake of cellphone-based gaming, industry data shows.
A total Sh1.59 trillion moved through the mobile platforms in the first six months of the year, according to Central Bank of Kenya (CBK) data, signalling that consumers in East Africa’s largest economy are on course to surpassing 2015’s full-year record of Sh2.81 trillion.
This means an average of Sh220.4 billion is moving on mobile money platforms every month compared to Sh186.4 billion per month in in a similar period last year.
Telecoms operators said transactions to bookmakers have added impetus to mobile money’s steady rise since it was first launched in Kenya nine years ago.
The betting industry has emerged as a major player in the mobile money industry alongside retail payments, peer-to-peer transfers, and diaspora remittances, according to telecoms operators.
Kenya now has more than a dozen betting and gambling platforms and the list has continued to grow in recent months as investors rush in to capitalise on the growing popularity of bookmaking in the East African nation.
Mobile-based sports betting and gambling has continued to grow, aided by the ease of placing bets online or through SMS and paying via mobile money platforms such as M-Pesa and Airtel Money.
“Betting transfers have been among the leading Airtel Money transactions, especially over the weekends and when the English Premier League is on,” said Adil El Youssefi, chief executive at Airtel Kenya, said in an interview.
Airtel Kenya partnered with one of the betting firms in March 2016, offering gamblers free deposit services to their betting wallets as well as free withdrawals when transferring winnings to their Airtel Money wallet.
Users, however, pay a fee when withdrawing cash from Airtel Money.
About five million Kenyans have taken up mobile-based gambling — mostly sports betting and lotteries — according to data from the Betting Control and Licensing Board, the industry regulator.
The increasing appetite to gamble from the comfort of one’s house or office pushed up the number of mobile money transactions by more than a third to 708.6 million deals from 518.2 million in the first half of 2015.
Safaricom chief executive Bob Collymore in May told Bloomberg that “sports betting is using M-Pesa a lot,” adding that the sector had “absolutely overtaken everyone else”.
Betting has now become a primary M-Pesa user, alongside paying for shopping, utility bills (water, rent and electricity), receiving company dividends and microloans.
Safaricom Wednesday described betting as simply one of the many uses of the M-Pesa platform, adding that the majority of betting-related transactions are small amounts, in the range of between Sh20 and Sh100.
Low-denomination gamblers are, however, known to make multiple bets, making it a lucrative activity for the telecoms operators in the form of fees paid to the bookmakers’ paybill numbers.
Kenya has 40 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 162,465 agents as at June.
Betway Kenya country manager Wanja Gikonyo said the platform was “growing in leaps and bounds” but declined to reveal the number of gamblers or volumes of cash involved.
Betin Kenya, owned by Coast-based Italian millionaires Domenico Giovando and Leandro Giovando, in August notified consumers of a new tariff of Sh22 for every deposit.
“As you may have heard, other bookmakers will be charging on all deposits you make. Unfortunately, we now have to introduce a Sh22 charge for deposits from Sh100-Sh300,” Betin Kenya said in an email dated August 9, 2016.
This means that it costs Sh22 to deposit Sh100 to any betting platform’s M-Pesa paybill.
In the event of a win, gamblers also incur a standard fee that M-Pesa charges to withdraw a windfall.
The latest report by the Communications Authority of Kenya says the growth of mobile money is also powered by school fees payment as well as payment for goods and services.
Kenyans living, studying, and working abroad are also fuelling the growth of mobile money by opting to send cash directly to the mobile wallets of dependants, deeming this more secure and convenient compared to using traditional agents.