Banks have cut the number of automated teller machines (ATMs) for the fifth consecutive month, taking the overall count to levels last seen over 11 years ago on the continued switch to agency, the Internet and mobile banking.
Central Bank of Kenya (CBK) data shows the banking sector shut 55 ATMs in five months to close December at 2,282 ATMs, the lowest count since October 2012 when there were 2,264 such machines.
The continued drop in the number of ATMs, once the epitome of convenience, reflects the impact of the growing popularity of agents, Internet and mobile banking among customers as they search for even more convenience.
The latest count means banks have shut 370 ATMs since March 2016 when the number hit the peak of 2,652.
The ATMs for long helped customers escape the long queues in banking halls but the onset of mobile banking has appealed more.
The financial services sector is experiencing an increasing preference for mobile money wallets, which are being complemented by agents for banks and mobile money firms.
The continued drop points to the waning popularity of the once-revolutionary technology that was introduced in Kenya during the 1990s to decongest the banking halls.
Banks have slowed down their focus on ATMs but opted to enrich this technology with new capabilities such as the ability to deposit money as opposed to just the traditional use of cash withdrawal.
“The adaptation of digital channels such as mobile banking has made it more convenient to move money from bank to mobile as opposed to visiting ATMs,” said an analyst who sought anonymity.
“ATMs are also being shut down due to the cost of maintaining them that is making sure they are secure, transporting cash to them daily and we know that banks have been trying to cut their operational costs.”
The CBK statistics show the value of mobile money transactions in December hit a record at Sh788.35 billion last year, fuelled by increased demand for cashless transactions and the establishment of 4.14 million new active mobile money accounts to take the number to close the year at 77.26 million.
CBK data showed the number of agents crossed the 300,000 mark in June 2021 and has been on a general upward trend, even though with declines in a few months. The number stood at 322,404 in December.
The use of mobile payments skyrocketed at the onset of the Covid-19 pandemic in mid-March 2020 on waiver of charges on low-ticket transactions to reduce the use of cash.
Many customers continued to use digital transactions even when CBK reinstated charges early last year.
CBK last year granted Safaricom, Telkom Kenya, and Airtel Kenya approvals to increase the daily money transaction and account limits, marking a further boost to the profile of mobile transactions in the financial sector.
