Bank cards show resilience in Kenya despite mobile money dominance

Source: Xinhua| 2017-06-08 01:16:12|Editor: yan
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NAIROBI, June 7 (Xinhua) -- Use of plastic money and acquisition of the cards is showing resilience in Kenya despite the domination of mobile money.

Mobile money has for the last years stifled the growth of plastic money, with many pointing to the death of the cards but new data from Central Bank of Kenya (CBK) showed Wednesday that the latter is in Kenya to stay, the onslaught notwithstanding.

As at April, according to the CBK, the number of debit card users stood at 13 million, a marginal rise from 12.9 million in March.

Similarly, the number of credit cards surged from 220,154 in March to 235,350 in April, with the other cards recording marginal rises.

On the other hand, despite banks shifting their services to digital platforms, the number of ATM cards and prepaid cards swelled, the data showed, as the total volume of cards rose to 14.8 million at the end of April, from 14.6 million in March.

And as the number of cards surged during the period, so was the value of transactions, which stood at 1.1 billion U.S. dollars a month for the total cards, marking a slight rise.

Of all cards, debit cards are the most popular mainly as people prefer to spend their own money than use credit cards which involves taking credit.

"Initially, I used to use my ATM card, which was changed to a debit card sometime back by my bank, rarely when purchasing goods at the supermarket. But these days I find it convenient and I am constantly using it," said Gilbert Wandera, a computer salesman in Nairobi.

Wandera has linked his bank account with his mobile money account using an app, which means he can easily transfer money from one account to another and can use his card to withdraw money from his mobile account at the ATM.

Commercial banks in Kenya despite divesting from teller machines and investing in mobile banking services still issue out debit and credit cards.

Nearly all Kenya's 42 commercial banks have retained their debit and credit cards despite the shift to digital platforms.

On the other hand, on average, Kenyans are moving 2.8 billion dollars on mobile money every month, according to the CBK, from to 2.6 billion dollars last year.

"The resilience of plastic money is a clear indication that it still has a chance of growth in Kenya despite widespread use of mobile money and banks shifting to digital banking. Most of those using the cards are the high-income earners in the middle and upper class who are doing it because the cards represent some class unlike mobile money which is used by everyone," said Henry Wandera, an economics lecturer in Nairobi.