Mobile transfers a record Sh7bn daily

Money transacted through mobile phones daily has hit a record Sh7 billion.  This paints a rosy picture for the future of the new platform that is deepening  financial inclusion in Kenya.

Analysts project a bright future for mobile money business now that it is being used in various aspects of the economy.

The surge in daily transactions was driven by new agents seeking to tap into the growing mobile money business.

In October, Kenyans transacted an average of Sh7 billion daily, translating to monthly transmission of Sh210 billion.

In the first 10 months of the year, transactions through mobile phones reached Sh1.943 trillion, surpassing last year’s  Sh1.9 trillion by Sh41.7 million.

Mr Samuel Gichohi, a senior analyst at NIC Securities, says the festive season has seen people send money to their relatives especially in the rural areas.

He said convenience and security of using mobile money in making financial transactions are attracting different players in the economy to use the service.

“Banking sector is increasingly shifting more to mobile and online banking to provide a convenient alternative to consumers,” Mr Gichohi said, adding that it is also relatively cheaper and “time-efficient” to transact using mobile money.

A total of 4,527 new agents signed up for mobile money transfer business in October, the third highest new signing in a month since the launch of the cash transfer services.

Other high monthly signing of new merchants were recorded between December 2012 and January 2013 when 8,636 agents registered to offer mobile money transfer business. As at the end of October 2014, the number of agents stood at 128,706 compared to 124,179 in September 2014. Mobile transactions rose to Sh210 billion in October compared to Sh206 billion recorded in September.

New products such as Safaricom’s Lipa Na M-Pesa have also aided in the uptake of the service, pushing up transaction volumes. The service now has over 32,000 active merchants.

Analysts further attribute the growth to diversification in the use of the mobile money services.

Increased marketing

“Diversification in the use of mobile money services, not just for money transfers but for utility payments is what is causing this growth.

We are also seeing increased marketing of cashless payment services by various players in the market,” said chief executive officer of Jambopay, a payment services firm, Mr Danson Muchemi, last month.

Equity Bank has also joined the mobile money bandwagon with the launch of its mobile money transaction service, Equitel. Other companies in the business are Airtel, Orange, Tangaza Pesa and MobiKash.

Increase in the use of mobile money services has seen transactions made through electronic payment cards decline. For instance, transactions through electronic payment cards stood at Sh1.5 trillion in 2013 against Sh1.9 trillion made through mobile phones.

In the first 10 months of 2014, transactions via payment cards stood at Sh104.8 billion, a 19 per cent decline from Sh129.7 billion registered in a similar period in 2013.

Growing integration of the service in different sectors of the economy such as the financial services industry, transport and in making payments for government services, have driven growth that is expected to gather speed in 2015.

“The future is looking more mobile and online banking,” Mr Gichohi said.

Kenyans, he said, use their mobile money to purchase airtime, data bundles, transfer money and pay bills. They also make bank transactions such as depositing or withdrawing money via various mobile money transfer platforms.

Other  Kenyans, Gichohi said,  use mobile services to pay school fees, hospital bills, electricity and water bills as well as  to shop online and at retail outlets.