By M&M Reporter
Mobile money transfer is set to become the biggest payment method in commercial transactions if a white paper released by Kenya’s ecommerce giant, Jumia, on March 11, 2019 is anything to go by.
In the Kenya Mobile White Paper 2019, Jumia reveals that mobile payments was the most preferred payment method for shoppers on the e-commerce platform.
“In 2018, 70 per cent of all transactions made on Jumia were done through mobile money and rest 30 percent through other payment methods including cash on delivery and card payments,” says Jumia.
Coming just a day before Safaricom announced a service that will allow its subscribers to pay for goods purchased in China using M-PESA, the Jumia paper highlights the increasing role the mobile money transfers are playing in facilitating trade in Kenya.
Jumia points out that growth of mobile money is supported by increasing adoption of mobile payments by major sectors of the economy, such as financial services, retail and wholesale trade.
“Unlike when mobile money platforms were largely used for person to person cash transfers , they are now increasingly being used to initiate and cut business deals such as the purchase of goods and services as well as processing of instant short term loans, driven by more than 300 loan apps in Kenya alone,” says Jumia in the paper.
Another crucial insight in the paper is pricing of smart phones in the Kenyan market. Jumia says there has been a dramatic drop in the average price of a smart phone over the last three years a factor that has contributed to the high internet access in the country.
“The average amount spent to purchase a smart phone on the platform in 2014 stood at US$ 186 (Ksh18,600), which reduced to US$ 97 (Ksh9,700) in 2016 and US$86 (Ksh8,600)in 2018 respectively. The rise of affordable entry-level devices from brands continues to remain a key driver of smart phone adoption,” says the paper.
Latest data from Communications Authority of Kenya (CAK) shows that 43.3 million have access to the internet or 84 percent of the entire population.