Mobile money agents post first drop in quarterly cash


The value of cash handled by mobile-money agents registered its first quarterly drop. FILE PHOTO | SHUTTERSTOCK

The value of cash handled by mobile-money agents registered its first quarterly drop in the three months that ended March as small transactions dominated.

Data from the Central Bank of Kenya (CBK) shows the values referred to as agent cash in cash out eased by Sh5.65 billion to Sh1.813 trillion from Sh1.818 trillion in March last year.

This marks the first decline in the first quarter since the banking sector regulator began recording the transactions in 2009.

The fall in cash handled by mobile money agents is indicative of reduced transaction values by customers who visit the agents to make either cash deposits or withdrawals.

The volume of total agent cash meanwhile increased, indicating that consumers and small businesses are making more low-value transactions.

The volumes rose by 7.1 percent to stand at 587.96 million transactions in the review period, up from 549.06 million transactions in the corresponding period last year.

Likewise, the number of active mobile-money agents has been growing and ended the quarter to March at 321,149 in contrast to 302,837 at the same time last year.

Additional data from the Communication Authority of Kenya (CA) shows the continued rise of mobile money payments with the number of mobile-money subscriptions, for instance, registering a 3.3 percent growth in the quarter that ended December to 38.65 million.

This represents a 78.2 percent penetration rate for mobile money services which contrasts with a lower 72.3 percent in December 2021.

Mobile money services have continued to soar as a payment channel despite concerns of a dip that surrounded the return of fees on peer-to-peer transfers of values below Sh1,000 as the CBK rolled back cushion measures that had supported the economy at the onset of the Covid-19 pandemic.

The waiver of fees on mobile-money transfers below Sh1,000 lapsed on January 1 even as the CBK introduced lower tariffs while maintaining zero charges on transfers of up to Sh100.

Subsequently, telco operator Safaricom which controls about 98 percent of mobile money payments announced the slashing of M-Pesa transaction fees by up to 45 percent.

Charges on mobile transfers between Sh101 and Sh500 for instance fell to Sh6 from Sh11 previously while transfers above Sh20,000 were capped at Sh105.

CBK credited the waiver of fees with the cementing of the mobile payments which have since held steady even after the return of fees.

"For instance, the monthly volume of person-to-person transactions increased by 87 percent between February and October 2020. Over this period, the volume of transactions below Sh1,000 increased by 114 percent while 2.8 million additional customers are using mobile money," the CBK said in December 2020. 

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Note: The results are not exact but very close to the actual.