The value of cash handled by mobile money agents, including those linked to banks and telecommunications firms, fell by a record Sh430.3 billion in the first 11 months of last year, signalling a shift in payment channels, heightened tax scrutiny and a tighter liquidity environment.
Data from the Central Bank of Kenya (CBK) shows that cash handled by the agents fell to Sh7.514 trillion between January and November last year, down from Sh7.944 trillion in the same period in 2024.
“This might be as a result of a range of factors,” said an official who heads a digital payments department in a local bank, who spoke on condition of anonymity.
“We are seeing tighter liquidity and a relatively high interest rate environment, which is pushing individuals to hold funds in interest-bearing accounts rather than cash.”
The agents sampled by the CBK, the financial sector regulator, include those of telecommunication companies such as Safaricom’s M-Pesa and banks through their agency banking shops.
The historic drop also comes at a time when Kenya’s payment infrastructure has undergone significant changes, with small-value transactions —such as settling matatu fares or grocery bills— now increasingly done through mobile phones rather than cash, reducing the need for trips to agents to withdraw money.
Banks have also made a more aggressive entry into the digital payments space that was once the preserve of M-Pesa by charging lower fees than telecoms operators in some cases.
Since the inception of M-Pesa in 2007 and the subsequent rollout of agency banking, cash handled by agents has fallen only once, in 2023, by a small margin of Sh35 billion.
Despite the decline in cash handled by agents, data from the national statistician points to improved economic performance last year compared to 2024, suggesting that fewer trips to agents by Kenyans do not necessarily signal economic distress.
For example, in the first nine months last year, the size of the economy, or gross domestic product (GDP), expanded at a faster rate compared to the same period in 2024, data published by the Kenya National Bureau of Statistics (KNBS) shows.
Other leading economic indicators —such as money supply, stock market performance, exchange rate stability, and cement consumption— also point to increased transactions, as Kenyans engage in a flurry of economic activity.
The Covid-19 outbreak year of 2020 and the following year recorded the sharpest increases in cash handled by agents, as the CBK implemented emergency measures to cushion Kenyans against the adverse effects of the pandemic.
The biggest jump came in 2021, when transactions rose by Sh1.639 trillion as customers took advantage of zero fees on mobile wallet–to–bank account transfers, depositing money into their mobile wallets at no cost. Free mobile-to-bank transfers ended in December 2022.
At the time, M-Pesa agents benefited from increased bank deposits via the mobile money platform due to the removal of transfer fees.
The telecoms operators paid the agents commissions of Sh28.21 billion in the year to March 2021, up from Sh23.82 billion the year before as M-Pesa-to-bank transactions surpassed bank-to-M-Pesa transfers for the first time.
Officials of M-Pesa Africa attributed the significant jump in deposit volumes to customers using M-Pesa to deposit money they would have otherwise deposited directly with banks.
However, this has been changing, with some traders avoiding agents for fear of being tracked, said the banker.
The increased use of digital platforms for taxes, levies, fees, and government services might also have discouraged cash payments and further reduced cash in circulation.
“Stronger scrutiny of large cash transactions by banks and regulators discourages high-value cash usage, pushing businesses toward traceable electronic channels,” said the banker.
In the 11 months to November 2025, the number of mobile accounts grew by 7.21 million to 89.1 million accounts, while active agents rose by 26 percent to 4.7 million agents.
The divergence points to weakening cash-in and cash-out activity, a key revenue source for agents.
Agents earn a commission for deposits and withdrawals they process.
The Kenya Revenue Authority intensified the use of digital transaction data to improve compliance, particularly among SMEs.
Digital payments, including mobile money, were targeted as a critical component of broadening the tax base.
Analysts say the increased linkage between mobile payments and tax enforcement encouraged some cash-dependent businesses to limit withdrawals or reintroduce cash transactions, especially in sectors such as retail trade, hospitality, and transport.
As cash handling declines, growth opportunities are shifting toward merchant acquiring, embedded finance, digital lending, and SME payments platforms, where margins are higher, and cash is less central.
Regulators say the challenge is to encourage digital payments for efficiency and transparency while ensuring enforcement does not unintentionally push small traders back into cash-heavy operations.
