Mobile money transactions hold steady after return of fees


Mobile money transactions hold steady after return of fees
An employee assists a customer to set-up M-Pesa money transfer servive on his handset inside a mobile phone care centre operated by Kenyan's telecom operator Safaricom; in the central business district of Kenya's capital Nairobi, file. REUTERS/Thomas Mukoya

In Summary

  1. According to data from the Central Bank of Kenya (CBK), the value of mobile-money transactions in January stood at Ksh.590.4 billion represented in 173.9 million solo transactions.
  2. The data reveals that Kenyans transacted Ksh.19 billion everyday during the opening month of the year represented in 5.6 million daily transaction.
  3. This tally beats an average Ksh.14.9 billion in daily mobile money transactions represented by 5.1 million transactions between April and December when the waiver of fees on transfers was in existence.

The value and volume of mobile money transactions by Kenyans has held steady defying the end of free transfers up to Ksh.1000 at the end of last year.

While the sum of the transaction has slightly dipped from December, the deals have not seen a significant truncation as earlier premised.

According to data from the Central Bank of Kenya (CBK), the value of mobile money transactions in January stood at Ksh.590.4 billion represented in 173.9 million solo transactions.

Meanwhile, the number of mobile money subscriptions extended their recent expansion hitting 66.6 million from a flat 66 million.

The number of mobile money transacting agents similarly rose to 287,410 from 282,939 in December.

The data reveals that Kenyans transacted Ksh.19 billion everyday during the opening month of the year represented in 5.6 million daily transactions.

This tally beats an average Ksh.14.9 billion in daily mobile money transactions represented by 5.1 million transactions between April and December when the waiver of fees on transfers was in existence.

Nevertheless, experts have previously warned that the size of mobile money transactions would wane slightly after the end of the fees cover with costs subsidies being seen as an incentive to the use of the service.

“Lower fees will encourage Kenyans to continue using mobile money. Charges and commissions are usually considered a major factor towards adoption,” Abojani Capital founder Robert Ochieng told Citizen Digital in a previous interview.

Record 2020

Backed by the cost incentives, mobile money transactions marked a record breaking performance in 2020.

An analysis of CBK data on the transactions throughout the year reveals the might and potency of the platform on the economy.

Kenyans for instance transacted Ksh.5.2 trillion on the mobile money platforms in the 12-month period represented in 1.97 trillion individual transactions.

Broken down to a daily figure, Kenyans moved an estimated Ksh.14.2 billion on the mobile channels in 5.4 billion solo transactions.

By the hour, Kenyans moved Ksh.592 million, Ksh.9.9 million by the minute and Ksh.165,000 by the second.

By volume, Kenyans made 225 million mobile money transactions per hour, 3.8 million transactions per minute and 63,000 transactions by the second.

The waiver of fees on mobile money transfers up to Ksh.1,000 was introduced on March 16 last year by the CBK as an emergency measure to promote the use of cashless transactions during the COVID-19 pandemic.

Kenyans took advantage of the free window to break up larger transactions in parts of Ksh.1,000 each for the very first time pushing up the volume of transactions in the period.

According to analysis by Genghis Capital published in October last year, ‘smaller transactions’ were on the rise on the back of the CBK announcement with over 85% per cent of transactions on Safaricom’s M-Pesa for instance being deals below Ksh.1,000.

At the end of the year, CBK allowed mobile money operators/telcos to resume charges on transactions below Ksh.1,000 but retained the waiver touching on fees charged between bank accounts and mobile wallets.

The CBK nevertheless encouraged the payment providers to consider lowering fees on transactions to bolster cashless transactions.

Subsequently. Safaricom revised its mobile money transfer costs downwards up to 45 per cent.

The mobile-money ecosystem is seen as an integral part of the country’s economy and financial system.

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