Cash handled by mobile money agents crossed the Sh700 billion mark for the first time in July, reflecting the full interoperability of mobile money merchant payment platforms and increasing reliance by businesses on digital payments.
Transactions at the agents were recorded at Sh722.5 billion, an 8.6 percent growth from Sh665.1 billion in June, the latest Central Bank of Kenya (CBK) data shows.
In July, Airtel and Telkom Kenya subscribers were allowed to make payments via Safaricom’s M-Pesa paybill platform, having earlier been granted access to the Lipa na M-Pesa till payment option on the country’s leading mobile money platform.
Through the Paybill option, mobile users are able to pay for utilities and transfer cash between their wallets and bank accounts.
“Other than the interoperability, the ubiquity of mobile payment agents more so for business transactions like customer-to-business and business-to-business, cannot be gainsaid. These two streams are the drivers of the notable spike in value transacted via mobile payments,” said Churchill Ogutu, an economist at IC Asset Managers (Mauritius).
The CBK data shows that the total value of transactions in the seven months to July rose by 18.3 percent to Sh4.56 trillion from Sh3.86 trillion in the corresponding period in 2021.
Effectively, this means that one in every three shillings spent by consumers, businesses, and the government in Kenya is now moving through mobile money, cementing the country’s position as a global leader in the mobile money revolution.
The deepening of mobile money in the country is behind the push for full interoperability that was completed in July, as all the players demanded a share of the pie.
The mobile money business has shown faster growth for telcos compared to voice and data, owing to the surging transaction volumes.
Safaricom’s M-Pesa for instance made a profit of Sh50 billion before tax in the year ended March 2022, contributing nearly half of the company’s total gross earnings in the period.
In the previous financial year, the gross profit from mobile money stood at Sh39 billion, accounting for 41.7 percent of the group’s total profit before tax.
The growing profitability has been helped by the increased adoption of mobile payments in the past two years, after the transaction limit was increased to Sh150,000 and the mobile money wallet amount was raised to Sh300,000 from March 2020.
