Why Is Kenya Preferring Mobile Money Over Cash?

Kenya is one of the fastest-growing economies and 7th most populous country in Africa. It is a popular tourist destination for people who want to explore wildlife. Kenya is also popular in Africa for the fast adaptation of mobile payment technology.

Many people have started using mobile money for their day to day transactions. Safaricom Mpesa has helped the country to use the mobile money transaction more as the Safaricom Mpesa charges are very low.

An increasing number of people in Kenya are finding it more convenient to pay through Mobile money. According to BBC, 73% of the population in Kenya has a mobile payments account.

This is much higher when we compare it to other countries in Africa. 45 million Mobile money users account registered by 2018 in the country, according to the Central Bank of Kenya.

The use of Mobile money during the pandemic has seen tremendous growth during the pandemic. On Ecommerce platforms, people in Kenya are preferring to buy products through online payment instead of cash on delivery. Kenya is contributing to making the world cashless by using digital payments.

MPESA provides a secure, reliable, and cheap way to make mobile payments. The government of Kenya is also utilizing this opportunity to make the payments cashless in the country. Here are some of the reasons why people are preferring mobile payments over cash in Kenya.

Quick, Secure, and Simple Transactions

One of the main advantages of online mode of payment over traditional methods is security. Online modes of payments like Mobile money enables users to make transactions securely. Apart from being a secure mode of payment, Mobile money is also fast and simple.

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Money in the form of cash is prone to get damaged and stolen. Cash currency does have a limited lifespan. It causes trouble for someone who has received a very old or damaged bill.

Moreover, if you have to make a big payment, you may have to carry a large amount of cash with yourself, which is quite unsafe. With the boom of technology, many businesses and educational institutes are now accepting online methods of payment.

People in Kenya are embracing digital technologies to make and receive payments. Digital payments are easy to use and do not require high technical skills. It also saves a lot of time for the payer.

With the advent of online payments, people now don’t need to travel a long distance to make payments. Companies like Mpesa have played a big role in this transition from cash to online payments. This has made life convenient for both buyers and sellers in Kenya.

Helps to monitor the flow of Country’s Capital

Mobile payments have also made it convenient for the government to monitor the flow of money. Mobile payment services must be connected with the bank account of the user to make and receive payments.

All the personal details related to the user are submitted through the connected bank account. Every transaction made by the user is recorded and kept in records for future reference.

This eliminates the risk of having fraud bank accounts because of the several steps associated with the confirmation process.

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Transaction details like purchasing a product from an e-commerce platform or sending money to someone’s bank account are stored in records of the central bank of a country. This makes it easier to record and analyze the flow of a country’s capital.

It helps the government in many ways, such as eliminating illegal payments, money-hoarding, tax evasion, fraud money, etc. Verification of every citizen in a country is possible when the whole population uses online payment.

Mobile Payment helps to Avoid Contact

When it comes to safety, mobile payments are playing an important role in this pandemic. Avoiding contact during this pandemic is necessary to stop the flow of coronavirus. It is a highly communicable virus, and there is no cure and vaccine available in the market.

Traditional cash currencies require the hand to hand contact to make transactions possible. It is quite an unsafe way to make and receive payments during this crisis.

Digital payments have made it easier for people to practice social distancing in public. It is emerging as a great way to make payments in shops and e-commerce platforms. It helps them to avoid any kind of contact while making payment. Many people are also getting familiar with online payments due to this pandemic.

Hence, the government is promoting the use of mobile payments to stop the flow of coronavirus and make the payments cashless. It will set a strong base for online payment in the future across the world.

Generates Empowerment

To make consistent progress and growth, a country must be digitally empowered. In countries like Kenya, Digital empowerment is very necessary. It is difficult for many people to make a shift from traditional forms of currency to digital money. However, Digital currencies are also an important factor for generating empowerment in a country.

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Empowerment helps people to gain skills and overcome challenges. Using online modes of payment can make people digitally empowered.

People who are not confident with high technology can gain confidence by using Digital modes payments. It will help them to explore many benefits of digital payments.

It enables governments to collect data about each individual using digital payments. This makes it easier for the government to find the people who are living under the poverty line.

They can also find out the employment status of an individual through these data. The government can take necessary actions based on the data received from the bank account of users.

The Takeaway

Online payments have emerged out as a great way to make fast and secure payments. In many countries like Kenya, digital payment is booming.

More people are embracing technologies to make payments online. It enables people to purchase commodities directly from their bank. Mobile payment has many benefits, like safety, mobility, simplicity, etc.

Digital payment is also useful for the government to monitor the employment status of its people and keep an eye on the capital flow of the country. It also helps buyers to maintain the record of every purchase they have made.

Digital payment is the future of payments in the world. The countries which are adopting it early are going to make significant progress in the future.