Market Research Report
Payments Landscape in Kenya: Opportunities and Risks to 2022
|Published by||GlobalData||Product code||604400|
|Published||Content info||48 Pages
Delivery time: 1-2 business days
|Payments Landscape in Kenya: Opportunities and Risks to 2022|
|Published: March 5, 2019||Content info: 48 Pages||
Kenya's payment card market is still in the developmental stage, with card penetration of 31 cards per 100 individuals in 2018 and 15.1 transactions per card per year - lower than its peers South Africa, Morocco and Egypt. The low uptake of payment cards is due to the society's dependence on cash and the limited acceptance of payment cards at merchant locations. Overall, cash accounted for 88.7% of the total payment transaction volume in 2018. The popularity and wider acceptance of mobile payment solutions such as M-Pesa and Pesapal has been a major obstacle for payment card growth, as these solutions offer convenience and cost effectiveness.
Unlike banks, mobile payment solution providers offer their services to small merchants and charge lower processing fees, making them attractive among consumers. The government has taken several initiatives to bring the unbanked population within the formal banking system, which in turn helps promote card usage. One of these initiatives is the adoption of an agency banking model to provide financial access to individuals in remote areas.
Mobile-based payment solutions are growing at a rapid pace in Kenya, mainly due to their convenience and cost efficiency. As of March 2018, M-Pesa had 28.6 million registered users in Kenya, as well as 162,800 agents and 109,000 supporting merchants. Mobile payment solution providers typically charge lower processing fees. Example being Safaricom, which charges merchants a 0.5% transaction processing fee on its Lipa Na M-Pesa service, which is much cheaper that the average merchant service charge on bank card payments.
The number of transactions made by banking agents increased from 104.2 million transactions in 2016 to 139.8 million in 2017 - an increase of 34.1%. Growth in Kenya's banked population has led to a rise in overall debit card penetration in the country. To improve financial inclusion, all of Kenya's major banks offer agency banking services. According to the Central Bank of Kenya (CBK), as of December 2017 a total of 61,290 banking agents from 18 commercial banks and five microfinance banks were present in the country, increasing from 53,833 in December 2016.
Kenya's e-commerce market recorded a review-period CAGR of 21.5% due to increased internet penetration and a growing middle class, as well as the presence of various mobile payment services. Individuals purchasing goods online reached 2.6 million in 2017 - rising from 1.2 million in 2014 in Kenya - positioning it just behind South Africa and Nigeria in the African region.
The report "Payments Landscape in Kenya: Opportunities and Risks to 2022", provides top-level market analysis, information and insights into Kenya's cards and payments industry, including -
Companies Mentioned: Equity Bank, Co-operative Bank, KCB, National Bank of Kenya, Diamond Trust Bank, Barclays, Standard Bank, Visa, and Mastercard