The value of deals settled through mobile phones in first half 2019 rebound from last year’s slowdown to grow by Sh215.29 billion, pointing to cooling off of political temperatures and rapidly changing innovations and disruptions in financial services.
Mobile payments in the half year hit nearly Sh2.14 trillion, a growth of 11.21 percent compared with last year’s 6 percent rise to Sh1.92 trillion.
Growth in value of cash deals transacted through mobile phones in the first half of 2018 was slowest in recent years, an analysis of the Central Bank of Kenya (CBK) statistics indicate, and coincided with political calls for boycott.
Head of financial services and risk advisory at EY East Africa Robert Nyamu said the mobile apps such as Safaricom’s M-Pesa are constantly challenged by additional digital channels especially in the higher-income segment that is already connected to banks.
“There’s a lot of disruptions within and without financial services ecosystem that is changing those dynamics every year, and new innovations are coming in all the time,” Mr Nyamu said.
“The banks, for instance, know that mobile money is a big competitor to them and are constantly innovating to enable certain segments of the market who do some business on mobile apps to do them without going to M-Pesa.”
The central bank does not break down the share by mobile operators, but latest data by Communications Authority of Kenya (CA) indicate M-Pesa controlled 78.48 percent of the value of transactions in the January-March 2019 period.
Key sectors of the economy such as financial services, retail and wholesale trade, agriculture and health are increasingly integrating mobile payments in their operations.
“People are getting choices and everybody need to fight to be innovative. Even mobile money platforms keep on evolving and that’s why they keep on updating and adding new menu,” Mr Nyamu said.
Mobile money has become a key pillar of Kenya’s economy, with last year transactions valued at Sh3.98 trillion representing 44.70 percent of Kenya’s national output that stood at Sh8.90 trillion last December.
“M-Pesa is the tail that wags the dog, and it’s being felt everywhere in the world today,” former CBK governor Njuguna Ndung’u, who ignored banks to allow rollout of M-Pesa in March 2007, said last year.
Article Copyright by: BUSINESS DAILY AFRICA Click here