Kenya is poised to enter a new mobile money economy era, judging by the steady rise in cashless transactions for goods and services.
A new study by consultancy firm Deloitte says Kenya is ripe for a mobile money revolution and urges local businesses to align their sales models with the emerging reality to stay ahead of the competition.
The impending mobile payments revolution marks yet another first for Kenya, which has been a front-runner in mobile payments backed by innovations such as mobile money transfer service, M-Pesa.
The Deloitte report says the continued uptake of mobile payments by consumers has reached a critical point where it is posing a threat to traditional retail models based on cash payments.
The study found that 11 per cent of Kenyan consumers are already using mobile payments – more than five times Nigeria’s two per cent, nearly three times South Africa and Uganda’s four per cent and ahead of Zimbabwe’s seven per cent.
The figures represent only transactions paid for using mobile money, and excludes mobile money transfers.
The Deloitte study also found out that Kenya remains way ahead of its African peers on the use of mobile money transfers. The study found that 33 per cent of Kenyans are making mobile transfers compared to Nigeria’s 11 per cent, South Africa (15 per cent), and Zimbabwe (11 per cent).
Kenyan consumers were also found to be adopting mobile money faster than their African peers, placing the country in pole position to becoming the region’s first digital economy.
“The level of adoption of these services is currently low and the gap represents a significant monetization opportunity for operators,” the Deloitte report says, adding that 50 per cent or more of the mobile phone users had demonstrated a willingness to go cashless.
The report urges businesses to tap the anticipated mobile money opportunities by investing in understanding consumer behaviour to stay ahead of the competition.
“The holy grail of retail right now is understanding shopper behaviour live. As they move around you want to impact their decision to buy while they are in the store,” Deloitte Advisory Leader for East Africa Rodger George said when he released the report on consumer trends.
Prof George, who is also a visiting professor at the University of Cape Town’s Graduate School of Business , said Kenyan businesses must do more to tap into the huge opportunities that are emerging in the mobile phone economy.
Use of mobile phones has become an integral part of Kenyan lives, a development that is confirmed by the fact that they interact with the devices more than other users in any African country.
The study found that 71 per cent of Kenyans look at their phones within five minutes of waking up with a further 53 per cent looking at their phones before sleeping.
Credit: Business Daily