Money transacted through mobile phones between January and April 2015 rose by 18 per cent to Sh864.3 billion from Sh730.6 billion in the same period last year.
This now brings the value of money transacted through mobile phones since the launch of M-Pesa in March 2007 to the end of April to Sh9.2 trillion.
The sharp rise is attributed to the service’s convenience, which has attracted users from different sectors of the economy.
Continued entrenchment of mobile money with other financial and non-financial services and increased uptake has also seen the service register greater success even as the popularity of electronic payment cards evens out by the day.
Mobile money services were introduced in 2007 and have since registered phenomenal success with the popularity of electronic payment cards continuing to decline since the advent of M-Pesa.
Between January and April this year, transactions made through electronic payment cards stood at Sh427.6 billion, a marginal increase of 0.66 per cent from Sh424.8 billion transacted in the same period in 2014.
Cross-sector competition in both the mobile money and the electronic payment cards has increased with both local and international firms eyeing a pie of the multi-trillion shillings market.
Last week, global electronic payment card company, MasterCard, partnered with GTBank and Ecobank. Mastercard plans to circulate over 10 million cards in East Africa by 2018.
Last year, the firm joined hands with Equity Bank and KCB to issue MasterCard-branded cards in a bid to depose Visa, another global electronic payment cards provider, from the leadership position in the business.
Currently, Visa has about 7.5 million electronic payment cards in circulation in Kenya and commands about 52.8 per cent of the market.
MasterCard also plans to set up a Sh1 billion research lab in Kenya before the end of the year. The research lab will be used to develop and deploy new payments systems such as mobile applications and cashless payments expected to ease and fasten transactions for consumers.
PARTNERSHIPS
“With government pushing to move to cashless payments, both card and mobile money agents are working on improving product offerings, partnerships with firms as well as easing payment processes in order to gain advantage in the market,” say analysts at Standard Investment Bank (SIB).
On the mobile money front, Safaricom’s M-Pesa commands the lion’s share with about 78 per cent subscriber market share and about 63 per cent market share by agents. Other players fighting it out in the mobile money transaction business are Airtel, Equitel, Orange Telkom, Tangaza Pesa and MobiKash.
At the end of April, mobile money agents stood at 129,218, a 10.8 per cent growth from 116,581 dealers as at the end of a similar period in 2014.
The planned introduction of M-Akiba bond is expected to be a boon to the mobile money providers as it will give many retail investors a chance to invest in government securities using their mobile phones.
Starting next month, investors will be investing as little as Sh3,000 in government securities through their mobile phones.
M-AKIBA BOND
The minimum requirement of Sh50,000, which could also not be invested via mobile phones, had locked out potential retail investors in the multi-billion government securities market, making it a preserve of elite investors.
“The M-Akiba bond will enable an entirely new group of investors to access government debt securities via their phones, which will undoubtedly drive up the national savings rate,” said Mr Geoffrey Odundo, Nairobi Securities Exchange chief executive officer.
Mobile money services have mutated from a send-money only affair to a service that caters to a wide range of transactions across different platforms in Kenya and abroad.
It is now used in paying bills, money remittances from abroad, making banking transactions such as sending or withdrawing money to and from bank accounts, payments of fees to schools, hospitals, utility firms and other organisations, shopping at retail outlets, purchase of airtime and data bundles.
Analysts say growth in mobile money transactions will in future be aided by entry of commercial banks and other financial and non-financial institutions seeking to serve their customers through the channel as it is considered more convenient and secure.