The world is slowly moving into a ‘cashless society.’ However, while some countries have adopted the system pretty quickly, some are still moving slowly to make this a reality.
According to the site Merchant Machines analysis, countries still reliant on cash are Morocco and Egypt, coming in the second position and Kenya in the third position in the research.
Is cash still ‘king’ in Kenya?
Kenya is among the pioneer countries in Africa to come up with a mobile money service. Mpesa was launched in 2007 by Safaricom. The service has grown tremendously over the years it has been in existence.
It has removed the total dependence on cash for making payments. Most formal sectors make payments through digital platforms or via bank accounts.
Again, bills are affiliated with mpesa and other online payment methods. You can pay for goods and services with Mpesa. That is by entering the till number of the shop you want to buy from, and money from one’s Mpesa account is transferred to the shop’s account.
Bills like Dstv, electricity (KPLC), water bills, National Social Security Fund(NSSF), health insurance, and so much more can be paid through the lipa na Mpesa feature on the Mpesa app.
Don’t forget the ‘buy airtime’ option on the app, which allows its customers to recharge airtime on their phones.
However, physical cash still holds a position in the economy. It is still in use despite the cashless trend thriving.
The number one reason why it still holds roots is that most people in Kenya work in the informal sector. They receive their pay in cash. A good example is in building construction sites, where the workers receive physical money from their employees.
The charges on mobile money transactions also deter Kenyans from using the service for sending money or making payments. This is especially so when the amount of money in question is small, probably the main reason why informal sector jobs dwell on cash payment methods. The government is partly to blame for the high transaction fees. They impose taxes on mobile money transactions, forcing the platform providers to increase the transaction fee. Currently, the excise tax on Mpesa transactions stands at 16%.
Another reason why cash is still king in Kenya is cyber crime. Fraudsters steal a lot of money from mobile money accounts. Cases are on the rise in recent years, as there are loopholes that encourage fraud. Many people will opt for physical cash.
How Mpesa became a game-changer for cash payments
Since the launch of Mpesa in 2007, its usage has grown tremendously. Safaricom boasts of having 26 million users in Kenya alone, not forgetting the other users in the other 6 countries where Mpesa is in place.
Safaricom says that more than 500,000 businesses transact $7 million monthly. This shows how the platform is popular in Kenya.
Other players in mobile payments in Kenya
Mpesa is the most popular mobile wallet in Kenya. But, other competitors are also doing quite well.
Below is a list of
Mobikash
This is a mobile commerce provider in Kenya offering mobile money transfer services, mobile banking, and mobile payments.
Equitel
Equitel is a platform that enables Kenyans to send and receive money to their equity bank accounts from other mobile wallets or any bank in Kenya.
Airtel money
Airtel Money is a mobile money transfer service that also offers mobile banking and mobile payments.
Tkash
A Telkom Kenya app. Tkash also offers the same services as Mpesa and other mobile wallets.
Other mobile wallets include PayPal, Payoneer, and credit cards.
Final Thoughts
Going cashless 100% will take some time to achieve. Developing countries are facing the same challenges and some are even worse than Kenya.
Not unless the government helps foster this dream of going cashless properly, then we’re nowhere near a cashless society. They can learn from their counterparts, who have been successful in the cashless wave.
Main photo: By Rosenfeld Media – https://www.flickr.com/photos/rosenfeldmedia/7171804334, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=73534018
