Electronic payments made through real-time bank transfers were nearly flat in the first six months of the year compared to the similar period in 2017, partly due to the ever- growing use of alternative mobile-based channels.
The value of transactions cleared and settled through the Real Time Gross Payment System (RTGS) and the Kenya Electronic Payments and Settlement System (KEPSS) fell by Sh199.44 billion, or 1.41 per cent, to Sh13.96 trillion in the review period.
The latest data by the Central Bank of Kenya (CBK) shows traders settled an average of Sh2.326 trillion monthly in the January-June period compared with Sh2.359 trillion a year earlier.
The value of cheques, cleared at the Automated Clearing House run by the Kenya Bankers Association, also dropped by Sh24.11 billion in the six months to June to Sh1.28 trillion compared with the same period in 2017.
Mercyline Kyalo, a senior research analyst at Kingdom Securities, linked the drop in real-time bulk payments and cheques on rising uptake of alternative payment platforms such as PesaLink, an inter-bank mobile payment channel for transactions up to Sh999,999.
“It could be that some businessmen prefer direct deposits and there is also M-Pesa and all these other mobile channels such as PesaLink where banks can do transfers directly,” said Ms Kyalo.
The CBK requires banks to process and settle payments above Sh1 million through the real-time RTGS/ KEPSS system where cash reflect within four hours of getting instructions under guidelines enforced from October 2009.
The real-time transaction-by-transaction payments enable the CBK to scrutinise and flag suspicious or unusual transaction that may be linked to money laundering or financing of terrorism. Some shrewd traders, however, try to avoid the regulatory scrutiny by splitting up bulky payments using other channels like cheques where transaction are capped at Sh1 million and takes up to two days or through cash withdrawals in banking halls.