Airtel Money and M-Pesa shops in Nairobi. Money transferred through mobile phones hit Sh375.1 billion in the first quarter of the year from Sh240.77 billion sent between January and March last year. Photo/File
The value of money transferred through mobile phones rose by 55.77 per cent in the first three months of the year to Sh375.1 billion, as more users switched to paying for goods and services through their phones.
New data from the Central Bank of Kenya (CBK) shows that money transferred through mobile phones rose by Sh134.3 billion in the first quarter of the year from Sh240.77 billion sent between January and March last year.
The amount of money transferred through mobile phones in the first quarter of 2010 stood at Sh154.49 billion, having risen from Sh89.58 billion in 2009, and Sh16.03 billion in 2008.
Michael Ghossein, the chief executive officer of Telkom Kenya which operates Orange Money, said that mobile phone cash transfer systems were evolving into payments systems, offering consumers more options.
“It is now transforming from mobile money transfer to mobile payments, soon you will be paying for goods and services such as groceries and fuel with the mobile phone,” said Mr Ghossein.
Companies have also begun adopting mobile phone money for payment of staff salaries. In the 12 months to the end of last year, the value of money transferred through mobile phones rose to Sh1.169 trillion from Sh732.22 billion in 2010.
“There is a market out there that is not exploited and the dramatic increase in the use of mobile money is a reflection of this,” said Habil Olaka, chief executive officer of the Kenya Bankers Association.
Mobile money was initially introduced to fill the gap that existed for transferring small quantities of cash particularly to remote areas of the country where there was no access to financial institutions.
Commercial banks viewed the mobile money operators as competitors at first, but have now forged partnerships which are fuelling adoption of the money transfer systems.
“The popularity has just exploded,” said Mr Olaka.
The number of mobile money transfer agents also rose to 55,726 in the first three months of the year compared to 36,198 in the first quarter of last year.
CBK said in its annual bank supervision report released last month that 13 banks had signed up partnerships with mobile phone providers to facilitate money transfer services for their customers and several other banks have expressed interest to introduce mobile financial services with the aim of offering better and convenient services.
“A number of institutions have initiated various innovations and new products to be able to conveniently serve their customers and reduce the long queues that were previously being experienced in the banking halls,” said the banking regulator.
There are six mobile money transfer companies in Kenya, with Safaricom being the market leader through its M-Pesa platform.
Telkom Kenya, Airtel and Yu double up as mobile phone and money transfer service providers while Tangaza and Mobikash exclusively offer money transfer services.
In the last month of last year, M-Pesa moved Sh116.6 billion according to the banking regulator’s data while Tangaza moved Sh1.31 billion, about three times the combined share of the other four rivals for that month.
Airtel Money transferred Sh420 million, Orange and Yu Sh20 million each while MobiKash handled Sh4 million.
The banking regulator said that there are over 18 million Kenyans using mobile phone platforms to make payments and send remittances; and over 40,000 agents facilitating transactions of up to Sh3.4 billion ($41 million) per day at the end of last year.
Increased use of the internet by financial institutions as a delivery channel would also help spur mobile money growth further, the banking regulator said.
