The value of cash handled by mobile agents in three months to March increased by 56.2 percent compared to the corresponding period of last year, despite the reinstatement of mobile money transfer charges.
Central Bank of Kenya (CBK) data show agents handled Sh1.696 trillion in the first quarter compared to Sh1.086 trillion in the same period last year.
This comes after mobile money operators reinstated transfer fees waived on transactions below Sh1,000 by the State in March last year to discourage use of hard cash amid the pandemic and cushion users.
Mobile money deposits and withdrawals are partly linked to these fees on person-to-person transactions or bank/sacco wallet to mobile wallet, however majorly depended on operator’s transaction band charges.
CBK announced resumption for the transaction charges on January 1, this year.
Mobile money services have been held up by increasing the number of active registered users to 32.46 million as at December, and agents to 264,390 representing 7.9 percent growth from quarter ended in September, according to the Communications Authority of Kenya.
There has been an increased preference for use of mobile money in the country, posing a high competition to other payment models such as cards and bank person to person transactions.
Safaricom through its mobile money transfer service, M-Pesa is the dominant player with 98.8 per cent market share.
The increased usage and mobile penetration has seen other operators announce moves as they struggle to cut M-Pesa dominance.
Telkom on Friday announced free transactions when sending money from its platform across the other networks for two months, in a move to gain traction against its competitors.
Airtel Africa is set to sell an undisclosed minority stake in its Airtel Mobile Commerce, a subsidiary of Pan-African mobile money business to private equity firm TPG for $200 million (Sh21.9 billion).
TPG sees a robust growth in the Kenyan market despite Airtel Money service being successful in other Kenyan markets.
In Kenya, it has less than 400,000 active customers against M-Pesa’s 27 million.
The increase in the money deposited and withdrawn also follows record rise in cash circulating outside the banking system in February to hit Sh231.37 billion.