Kenya mobile money use swells to U.S. $50,000 dollars a minute

Kenya’s 2014 mobile money use surged to a record 26.1 billion U.S. dollars, an increase of about 4 billion dollars from previous year.

This is a new high in the use of the technology that has transformed lives in the East African nation, boosted e-commerce and enhanced saving culture among Kenyans.

The 26.1 billion dollars annual use, which new data from Central Bank of Kenya (CBK) has showed, means that Kenyans are transacting 72 million dollars a day on mobile money platforms, 3 million dollars per hour or 50,000 dollars a minute.

This is a rise from 61 million dollars a day, 2.6 million dollars an hour or 43,333 dollars a minute in 2013.

Mobile money is deeply entrenched in the lives of Kenyans, making East African nation the global leader in the technology.

The data from CBK pointed out that most of the transactions are done during the holiday seasons like Easter and Christmas and when schools are re-opening in January, May or September.

As in previous years, the bulk of the transactions last year were conducted in December, where use peaked to 2.5 billion dollars as Kenyans send money to their family and friends for Christmas.

October came second with 2.3 billion dollars while July and August tied at the third with an average of 2.2 million dollars.

In terms of quarters, the bulk of the transactions happened between October and December, where amount exchanged on the platform stood at over 7 billion dollars.

The third quarter came in second with Kenyans moving 6.7 billion dollars on their phones.

The second quarter saw Kenyans move 6.3 billion dollars while in the last quarter, transactions stood at 6 million dollars.

Analysts attribute increased usage of mobile money in the East African to two things. First is the licensing of three other players into the sector and second is the embracing of the platform by small businesses.

Communication Authority of Kenya in April last year licensed Tangaza Pesa, FinServe and Zioncell, mobile virtual network operators, to enhance competition in the industry dominated by Safaricom’s Mpesa, which has over 95 percent market share.

Other telecoms that offer the service are Airtel (Airtel Money), Orange (Orange Money) and Yu (Yu Cash).

The CBK data showed that the move to license more players led to increased usage of mobile money.

In April when the companies were licensed, transactions stood at 2.1 billion dollars a month.

This, however, jumped to 2.2 billion dollars in May and accelerated in subsequent months.

Statistic from CA show that the mobile virtual network operators are already causing ripples in the sector, with MobiKash run by one of the firms having over 1.4 million subscribers as at the end of September last year.

"Mobile money use has reached unprecedented levels but will not slow down soon because more people are still subscribing to the service.

At 27 million subscribers, about 13 million Kenyans are yet to embrace the service, which means there is more room for growth," said Bernard Mwaso of Edell IT Solutions in Nairobi.

Mwaso predicted that Kenya’s mobile money use will at one time hit 33 billion dollars per year.

"This will happen when small businesses like groceries, chemists and market women where the bulk of buying and selling takes place, fully embrace the service.

"I believe this will happen in the next three years."

During the period in review, CBK data indicated that the number of mobile money agents rose to 123,703 in December up from 114,107 in January 2014 while the number of transactions per month closed the year stood at 85 million, up from 67 million.

SOURCE:COASTWEEK.