The volume of mobile transactions hit a record high in August even as the total value of the payments dropped, underlining a decrease in the size of each transaction.
Mobile money agents handled a record 208.61 million transactions in August, a 2.8 percent increase from the previous month, according to data from the Central Bank of Kenya (CBK).
This as the value of mobile transactions went down by 2.6 percent to Sh666.63 billion during the same period, signalling a drop in the value of mobile money transactions.
Amid tough economic conditions, Kenyans are becoming creative by sending money in small amounts to evade higher charges even as mobile payments increasingly displace cash in daily use.
The State has latched on to the increased use of mobile payments to boost tax revenue collection.
The Treasury raised excise duty on mobile transactions to 15 percent from 12 percent through the Finance Act 2023, which has led to higher money transfer charges.
The use of mobile payments skyrocketed at the onset of the Covid-19 pandemic in March 2020 on waiver of charges on low-ticket transactions to reduce the use of cash.
The CBK also waived charges on transactions between mobile money wallets and bank accounts.
The apex bank, however, reinstated the charges on January 1, 2023.
The regulator said the waiver had achieved its target of growing the use of mobile money and protecting users from high transaction charges.
The CBK also recently granted Safaricom, Telkom Kenya, and Airtel Kenya approvals to increase the daily money transaction limits as well as account limits to further boost the uptake of mobile payments.
The move is seen as particularly key for micro, small, and medium-sized enterprises, which have been constrained by the account and transaction limits even as the share of cashless transactions rises.
In Safaricom’s financial year that ended March 2023 for instance, more than 606,000 businesses were receiving payments through Lipan a M-Pesa with a total of Sh1.625 trillion transacted in the 12 months.
The increased usage of mobile payments has helped boost the growth of the information and communication sector, which grew by 6.4 percent in the second quarter of 2023.
Mobile money transactions increased by 5.4 percent, from 567.4 million in the second quarter of 2022 to 598.3 million transactions, further underscoring vibrancy in the sector’s activities.
