Bulk real-time bank transfers, largely made by companies and wealthy individuals, grew at a slower pace while cheque payments dropped to a seven-year low in the first half of the year on depressed economic activities which were exacerbated by Covid-19 shocks.
The slowdown in bank payments of more than Sh1 million came at a time private companies reported sustained drop in sales as measured by the composite Stanbic Bank Kenya’s Purchasing Managers Index (PMI).
Transactions settled through the Kenya Electronic Payments and Settlement System and Real Time Gross Payment System (KEPSS/RTGS) for the first six months of the year grew 4.79 percent, or Sh710.24 billion, year-on-year to Sh15.54 trillion.
The rise was slower than 6.26 percent, or Sh874.02 billion, posted in the corresponding period in 2019 when payments amounted to Sh14.83 trillion, data published by the Central Bank of Kenya (CBK) shows.
The value of cheques approved at the Automated Clearing House run by the Kenya Bankers Association (KBA), on the other hand, contracted 12.2 percent, or Sh158.23 billion, in the January-June 2020 period to Sh1.14 trillion compared to one year ago.
Transactions in cheques, which are restricted to payments below Sh1 million, dropped at a time public health and financial services authorities encouraged businesses and homes to use cashless payments such as mobile money to stem the spread of the coronavirus.
“This (Covid-19) pandemic-driven disruption …may cause a shift in terms of payment transactions preference towards mobile and online platforms,” head of financial services and risk advisory at EY East Africa Robert Nyamu told the Business Daily.
KBA chief executive Habil Olaka said in an interview on July 7 that banks and customers have embraced digital payment platforms such as interbank mobile payment channel PesaLink, which enables payments of below Sh1 million, to stem the spread of the virus.
RTGS and cheque payments require clients to visit banking halls to fill and sign off forms.
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