Card deals hit 10-month high as Covid rules ease

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The value of payments through cards hit a 10-month high in October due to eased physical contact restrictions that had been imposed to curb the Covid-19 spread.

Photo credit: File

The value of payments through cards hit a 10-month high in October due to eased physical contact restrictions that had been imposed to curb the Covid-19 spread.

Central Bank of Kenya (CBK) data shows the value of payments through point of sale (POS) machines hit Sh17.68 billion in October—the highest mark since January when Sh4.43 billion worth of transactions were recorded.

This marks a 22.52 per cent growth in the 10 months and reverses a trend of slumps in 2020 following restrictions to combat the coronavirus, which resulted in reduced footfall in shopping malls and retail stores, as well as muted business activity.

Buyer and seller

Many buyers, last year, also opted to pay by mobile money, which, unlike cash and card payments, preclude physical contact between buyer and seller.

This saw the value of payments made through cards in 2020 drop for the first time in six years amid lockdown measures as mobile money services took preference. The value of payments through POS machines dropped by 3.8 per cent in 2020 to Sh157.72 billion from Sh164.09 billion in 2019.

On October 20, President Kenyatta lifted a nationwide curfew that was imposed in March 2020 when the coronavirus first detected in Kenya. He also relaxed rules on social gatherings, thus boosting economic activity.

At the peak of pandemic last year, the government aggressively promoted mobile money payments to avoid the coronavirus spread, bringing in several measures to push this option.

These included raising the ceiling for mobile money wallets and doubling of the daily transaction limits to Sh300,000.

Value of transactions

The charges on money transfers below Sh1,000 were also waived to discourage the use of hard cash and help contain the virus. As a result, the volume and value of transactions below this threshold increased by 114 per cent and 200 per cent between February and October 2020, according to the CBK.

Charges for moving cash between mobile wallets and bank accounts were also removed, encouraging people to use mobile money.

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