Cashless payments hit Sh386bn in first half of year

What you need to know:

Credit card transactions increased to Sh2.79 billion from Sh1.89 billion, as the value and number of transactions at the point-of-sale machines jumped to Sh46.99 billion from Sh25.88 billion and 3.8 million from three million respectively.
The CBK data shows that the value of money transferred through mobile platforms jumped by 41 per cent in the first half of the year even as the number of customers grew at a slower pace.
The value of debit and credit card transactions increased by 83.04 and 47.62 per cent respectively as the value and number of transactions at the point-of-sale machines rose by 81.56 and 26.78 per cent respectively.
CBK said that Sh726.23 billion was transferred through mobile money platforms between January and June up from Sh513.87 billion in the same period last year.
The number of debit and credit cards issued had risen to 8.12 million as at the end of June from 7.07 million in the same period last year and to 131,397 from 119,287 as commercial lenders launched new products to attract high net worth customers.

Cashless transactions rose sharply in the first six months of the year as consumers increased purchases through mobile phones and debit cards.

Fresh Central Bank of Kenya (CBK) data on the use of plastic and mobile money platforms between January and June shows that the value of debit card transactions rose to Sh386.6 billion from Sh211.2 billion.

Credit card transactions increased to Sh2.79 billion from Sh1.89 billion, as the value and number of transactions at the point-of-sale machines jumped to Sh46.99 billion from Sh25.88 billion and 3.8 million from three million respectively.

The CBK data shows that the value of money transferred through mobile platforms jumped by 41 per cent in the first half of the year even as the number of customers grew at a slower pace.

The value of debit and credit card transactions increased by 83.04 and 47.62 per cent respectively as the value and number of transactions at the point-of-sale machines rose by 81.56 and 26.78 per cent respectively.

Suprio Sengupta, the general manager at I&M Bank, said that the increasing transactions reflect higher usage of the alternative forms of payment provided by systems that are becoming more sophisticated.

“Consumers are using cards more, (banks) have upgraded mobile banking platforms to give a wider product range,” said Mr Sengupta.

He said that point-of-sale machine transactions had increased as a result of higher usage at retail points and because customers have also increased shopping on Internet platforms.

CBK said that Sh726.23 billion was transferred through mobile money platforms between January and June up from Sh513.87 billion in the same period last year.

The number of customers linked to these platforms rose by nine per cent to 19.8 million from 18.15 million in the same time period and at an average of 1.01 percentage points between months.
“Customers registration with the leader (Safaricom) is nearing saturation. As a result, you cannot see customer growth but they are increasing usage of mobile money as more services are provided on the platform,” said Mr Oscar Ikinu, the chief executive officer of Mobile Pay, which owns Tangaza money transfer service.

The mobile money operators include Safaricom, Airtel, Orange and yu, which M-Pesa, Airtel Money, Orange Money and yu Cash platforms respectively.

The sector also has other players that do not offer mobile phone services such as Tangaza and MobiKash.

Mr George Wainaina, the managing director of plastic payments infrastructure provider Kenswitch, said that the number of subscribers to mobile money platforms is currently restricted to adults who have national identity cards or passports.

“The flat growth indicates that the market is well penetrated and future growth could be determined by the population growth rate and possibly by reaching outside of the Kenyan market,” said Mr Wainaina.

Uchumi Supermarkets CEO Jonathan Ciano said that the higher values of debit card and point-of-sale machines transactions may have been driven by rising prices and smaller more frequent transactions by consumers.

“People may be buying smaller baskets but more often. They are also moving away from carrying cash and there is more confidence in virtual systems,” said Dr Ciano.

The number of debit and credit cards issued had risen to 8.12 million as at the end of June from 7.07 million in the same period last year and to 131,397 from 119,287 as commercial lenders launched new products to attract high net worth customers.

In March, Commercial Bank of Africa launched a foreign currency credit card. Last year, Standard Chartered unveiled two cards targeting wealthy clients. NIC Bank also introduced the NIC Gold Credit Card for individuals who earn over Sh200,000 a month.

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