Threat on Safaricom: money transactions via mobile phone are down
July 6th 2020
The value of money transactions via mobile has decreased by 36.7 billion Kenyan shillings ($ 344 million ) over the first 5 months of 2020. This situation primarily concerns the operator Safaricom telephony companies, whose market share in the sector is 99%.
Money transactions via mobile phone are down 36.7 billion shillings ($ 344 million) in Kenya, we learn from data available on the Central Bank website. For the first 5 months of 2020, the total value of transactions via this payment method is 1,752 billion shillings ($ 16.43 billion) compared to 1,789 billion shillings in the same period in 2019.
April 2020 was the month with the largest decrease (50 billion shillings) compared to the same period in 2019. This period coincides with that during which containment was the strictest in Kenya to limit the spread of covid-19.
The progress of transactions using this means of payment will be closely monitored by Safaricom. The subsidiary of the South African group Vodacom is the market leader in money transactions via the mobile phone, with an estimated market share of 99.1%. Central Bank data do not distinguish between transactions between individuals and on which operators’ fees have been suspended from other forms of transfer.
In transactions between individuals alone, Safaricom expects to lose the equivalent of $ 152 million during this year 2020. Mobile money has become an essential component of the company’s revenues. Its investors will therefore be attentive to the impact of the current context on the financial performance of its first quarter, which runs from April to the end of June.
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