ATM numbers down to 2,301 as digital transactions take over


Kenya features more ATMs and commercial bank branches as a share of the population than Tanzania, Uganda and Rwanda. PHOTO | SHUTTERSTOCK

Banks shut down an additional 65 automated teller machines (ATMs) last year as the increased uptake of digital transactions reduces the need for physical cash dispensers.

This took down the ATMs in service to a new low of 2,301 in the review period.

The biggest drop in the number of ATMs was seen in 2018 when 296 of the machines were closed.

The reduction in ATMs continued, standing at 70, 47 and 46 in 2019, 2020 and 2021 respectively, according to data from the Central Bank of Kenya.

“The decrease in ATMs in 2022, is as a result of the adoption of agency, mobile and digital banking in the banking industry,” the CBK said in its 2022 Bank Supervision Annual Report.

Banks have invested heavily in digital services as a means of cutting operating costs and enhancing customer service.

This has enabled them to grow their customer base without the need to invest a lot in physical assets such as branches and ATMs as was the case in earlier decades.

Most of the country’s large banks including Equity Group and Co-operative Bank of Kenya say that more than 95 percent of their transactions are now on digital channels.

The lenders offer mobile and internet banking as well as running a network of agents who help customers make transactions like cash deposits and withdrawals that were previously only accessible at bank branches.

Some banks have introduced more features to ATMs to improve their capabilities, with such functions including the ability to accept cash and cheque deposits.

Despite this, they have continued to lose out to digital banking services whose uptake surged when CBK waived fees on the platforms (bank-to-mobile transactions) in the wake of the Covid-19 pandemic.

Between March 2020 and October 2022, the number of Kenyans actively using mobile money increased by over 6.2 million, the banking sector regulator said in December last year.

Over the same period, the monthly volume and value of person-to-person transactions increased from 162 million transactions worth Sh234 billion to 440 million transactions worth Sh399 billion.

Fees on bank-to-mobile services were reinstated at the beginning of this year though at reduced rates compared to the pre-pandemic days.

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