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Published On: Sat, Mar 11th, 2017

Kenyans Beat Nigerians in Mobile Money Transfers while Nigeria Surpasses Kenya on other Electronic Platforms

Kenyans moved a record $33 billion via mobile money platforms such as Safaricom, Airtel or Mobikash in 2016, up from $27.8 billion from the previous year, the latest data from Central Bank of Kenya has shown. In contrast, Nigerians moved N756 billion or $2.4billion.

However, Nigeria surpassed Kenya using other electronic platforms. Despite the economic downturn in Nigeria last year, over N56 trillion, about $177billion was moved through the electronic channels in the Nigerian financial system.

The surge in mobile money transactions in Kenya by about $6 billion consolidates the country’s global position in the use of the technology that has revolutionised its financial sector. The volume of cash transacted on the platform surpasses Kenya’s 2017/2018 budget, which is estimated at 25 billion dollars, underlying the role of the service to citizens and the economy.

In 2016, mobile money use peaked at $3.1 billion per month in December, according to the regulator’s data, up from $2.6 billion last year. Christmas and New Year festivities normally give mobile money use a boost as Kenyans send and receive various amounts of cash from their loved ones.

On the opposite, the least transactions during the period were carried out in January, with Kenyans moving $2.4 billion. Kenyans on average transacted during the period $2.7 billion a month up from $2.3 billion in the previous year.

Kenyans use mobile platforms to perform a range of financial services that include making money deposits, remittance delivery, payment of bills, withdrawal of cash and access of micro-finance credit. Therefore, mobile money has become a necessity in the lives of Kenyans. Many citizens are unable to operate without it.

In the period of review, according to the Central Bank, the number of mobile money subscribers hit 35 million from 31.6 million in 2015, which means only less than 10 percent of the country’s people has not subscribed to mobile money.

The number of agents during the period clocked 165,908 from 143,946 at the end of 2015 as the sector continued to be a key employer. Monthly transactions similarly swelled considerably, with East African nation citizens making over

146 million transactions a month from 107 million in 2015. Kenya has six mobile money service providers namely Safaricom, Airtel, Orange, Equitel, Tangaza and Mobikash. Safaricom’s Mpesa is the most popular, carrying out over 90 percent of the transactions. The company last week partnered with its peers in Rwanda, Tanzania and Uganda to enhance use of Mpesa in East Africa, an indication of expected growth.

The apex bank’s figures paint a healthy picture of growth of mobile money but Treasury has warned that collapse of service poses fiscal risks to the economy since various financial products have been leveraged on the payment channel increasing linkage between the technology and the banking sector.

“If this system was to be compromised, the impact would be substantial considering the linkages and the corporate tax revenue for government. The financial and other institutions linked to this system would be susceptible,” notes Treasury in its budget policy statement for this financial year.

Analysts expect mobile money use to sustain growth in the coming years as companies continue to innovate, people go for paperless transactions and unsubscribed embrace the service.

In contrast to Kenya, mobile money is yet to catch on in Nigeria. In 2016, N756 billion or $2.4billion was transacted through the channel. The number of mobile money customers in the country as at the end of last year stood at 5.54 million that are being cared for by 23,877 agents working for 21 Mobile Money Operators (MMO).

Likewise, goods and services worth N759 billion had been paid for using the 112,847 active POS terminals across the country. Payments through e-bills channel had the lowest volume of transactions of one million. Total value of transactions done through e-bills channel for the whole of 2016 stood at N339 billion.

Payments through webpay for 2016 stood at N132.36 billion which was done in 14.09 million transactions. NIBSS said in 2016, it has processed 11.7 million cheques with a value of N5.8 trillion. Corporate cheques accounted for the largest chunk of this figure as 5.9 million Corporate cheques valued at N3.7 trillion had been processed during the year while 2.7 million individual cheques valued at N0.94 trillion was processed.

Nigeria however scored higher in other electronic platforms. Despite the economic downturn in the country last year, over N56 trillion, about $177billion was moved through the electronic channels in the Nigerian financial system.

This is asides the cash transactions done over the counter in the banking halls. Total transactions through electronic payment platforms such as Automated Teller Machines (ATMs), Point of Sale Terminals (PoS), web payments, online transfers and mobile money from January to December last year hit N56.886 trillion.

According to the Nigeria Inter Bank Settlement System (NIBSS) which records and settles all electronic transactions in the country, online payments through the NIBSS Instant Payment (NIP) recorded the highest value, accounting for 67 per cent of total value of transactions while ATMs had the largest volume of transactions.

The value of funds that changed hands through NIP stood at N38 trillion which was done in 154.5 million transactions. On a daily basis, an average of 422,142 transactions had been done through the NIP channel as more Nigerians adopt the cashless policy of the Central Bank of Nigeria.

Total bank accounts held in the country by banks at the end of 2016 rose to 96.22 million from 85.02 million in 2015, while active accounts rose from 58.97 million to 65.48 million by the end of last year.

Source: Financial Technology 2 March 2017

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