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ATM use halves over pandemic

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A StanChart ATM lobby along Kenyatta Avenue in Nairobi. FILE PHOTO | NMG

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Summary

  • The survey across 12 markets including Kenya has shown that the Covid-19 pandemic has accelerated the adoption of non-cash channels as consumers reduce their exposure to the highly infectious disease.
  • In Kenya, 79 percent preferred to shop in-person prior to the pandemic compared to 21 percent online.
  • But this has shifted significantly, with more than half (51 percent) now preferring online payments to in-person, card or cash payments for future purchases.

The use of ATMs in Kenya has halved in the wake of coronavirus as Kenyans opt for contactless payment systems, a survey by Standard Chartered Plc has revealed.

The survey across 12 markets including Kenya has shown that the Covid-19 pandemic has accelerated the adoption of non-cash channels as consumers reduce their exposure to the highly infectious disease.

In Kenya, 79 percent preferred to shop in-person prior to the pandemic compared to 21 percent online. But this has shifted significantly, with more than half (51 percent) now preferring online payments to in-person, card or cash payments for future purchases.

“Cash withdrawals from ATMs are now half what they were two years ago. Today, 89 percent of transactions are being conducted digitally with a 62 percent and 90 percent penetration for our retail and corporate clients respectively,” said Edith Vjuma, the head of retail banking at Standard Chartered Bank Kenya.

Increased uptake of digital channels for payments has also been aided by the Central Bank of Kenya's removal of charges on M-Pesa transaction of up to Sh1,000 as well as elimination of charges on bank-to-M-Pesa cash transfers. The waiver was aimed at reducing use of cash and the attendant risk of Covid-19 being transmitted from person to person.

Data from the CBK shows that the daily average mobile phone money transactions of less than Sh1,000 grew 83 percent to Sh1.98 billion daily between April 20 and May 10 when compared to the days before March 16.

Kenyans have, however, reduced their spending on nonessentials, with funds being redirected to groceries and healthcare.

According to the survey, consumers spent 58 percent more on groceries, a 59 percent increase in spend on digital devices, and a 39 percent increase in healthcare expenditure.

Conversely, 80 percent of people say they have spent less on travel/holidays than they did before the pandemic, while 49 percent have spent less on experiences, and 83 per cent have spent less on clothes.

The online survey of 12,000 adults was conducted in August in 12 markets including Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK and the US.