September 12, 2015
Technological trends have put Kenya at the forefront of the mobile money boom in Africa. Statistics from the Central Bank of Kenya indicate that Kenyans transferred over KShs 1 trillion between January and June this year. The increasing competition between players has led to the growth in mobile payments in Kenya.
With the mobile space continuing to attract attention both for payment processing and money transfers, we expect continued growth as more products and services are loaded onto the mobile platforms, said analysts at Nairobi-based Standard Investment Bank (SIB).
In Kenya, access to financial services had been made possible by mobile network operators by leveraging their technology, distribution network and partnership with the banks to deliver mobile financial services to the people. Mobile money has enabled anyone in Kenya with a mobile phone to perform P2P transfers, bill payments and merchant payments. With 26.2 million mobile money accounts, Kenya now has one of the highest mobile money penetration rates anywhere in the world. Since mobile money wallets act as stores of value, mobile money providers have introduced additional payments functionality to allow customers greater choice in accessing other payments services. These additional use cases for mobile money have broadened the customer and client base, bringing efficiency to the payment system and enhancing revenue-generating opportunities for mobile operators.
The mobile money market in Kenya has been dominated by P2P transfers; P2P transfers also continue to make up the vast majority of transfers (about 85%).
Recent Mobile Payments Figures:
The financial services through mobile money in Kenya includes:
- P2P: In Kenya around 85 % of all mobile money transfers are P2P. In P2P, a user transfers value from his prepaid mobile wallet to another user’s mobile wallet. Most of the transaction value is between KShs 300-400 and below KShs 10,000.
- B2P (Business-to-person): This service allows an organization—whether it is a business, government ministry or NGO—to pay multiple recipients at a time by transferring directly into their mobile money wallets. Because the vast majority of rural and/or seasonal workers across Kenya lack bank accounts, organizations have needed to find ways of delivering cash to pay salaries and expenses.
- P2B (Person-to-business): This service allows a user to pay a company using their mobile money account. Around 700 organizations allow their bills to be paid via M- Pesa.