Lipa na M-Pesa business deals rise to Sh1 trillion
PAYMENTS: M-Pesa business-to-business (B2B) transactions jumped 13 per cent to nearly one trillion in the third quarter of 2020, riding on the falling cheque volumes and Real Time Gross Settlements (RTGS), the Communications Authority of Kenya (CA) data shows.
The volume of business- to-business transactions through Lipa Na M-Pesa rose to Sh994 billion from Sh878 billion dominating all payment categories.
“Values transacted during the period increased significantly from the previous quarter following the governments directive on the use of cashless payment systems to curb the spread of Covid-19,” CA said in its fourth quarter sector statistics released last week.
Data from Kenya Bankers Association(KBA) shows bulk payments made through real-time bank transfers and cheque payments dipped Sh621.8 billion and Sh143.73 billion respectively or a combined Sh765.53 billion on Covid-19 lockdowns.
Due to lockdowns caused by the pandemic, businesses did not need to do cheque deposits or use RTGS but opted to move money from their M-Pesa till to the till or phone number of the recipient business.
The number of M-Pesa agents also grew by 10 per cent in the period to 223,184 as demand for transactions soared on Covid-19 concerns.
Safaricom said the business to business volumes were helped by a recent upgrade on their systems.
“Previously, it would not be possible to deliver these functions directly from the business till.
A recent upgrade on M-Pesa for Business has opened the way and business people who have got the hang of these enhancements are now calling it the ‘new normal’,” Safaricom said in a press statement.
Businesses that deal with multiple suppliers such as retail stores are able to reduce their journeys to the bank by simply moving funds through till numbers.
The rising business to business transactions provide Safaricom with invaluable data for potential entry into SME lending in what could further rattle the traditional banking sector players.
“This concept allows us to pay suppliers conveniently, receive payments swiftly, pay salaries, check statements from anywhere, and make an extra dime through selling airtime,” Safaricom said.
Active mobile subscriptions increased from 29 million to 30.5 million in the third quarter of the year lifting peer to peer transactions by 24 percent.