The banking industry is fledgeling globally but it seems that mobile money will keep Africa’s banking afloat growing the continent’s banks revenues.
In Kenya, mobile money is the most popular mode of cashless payments with data showing that more than eight out of every ten cashless transactions performed in October 2018 were on mobile phones.
According to the Central Bank of Kenya (CBK), mobile money transactions are on an upward trend showing that more Kenyans are adopting the cashless economy.
It is with this knowledge that motorists across Kenya can now conveniently pay their parking fees and avoid the stress of being delayed when parking systems are slow or crowded.
To make this the reality countrywide, Safaricom has partnered with KAPS to enable drivers to pay for parking using M-Pesa.
Cashless payments at more than 50 locations
The partnership will see KAPS integrate M-Pesa to their platform, allowing cashless payments at more than 50 locations including malls and hospitals for the first time.
“We realized that parking is one of the services that still relies heavily on cash and there was a gap for us to offer our customers convenience, ease and simplicity to pay parking fees. Motorists can now enjoy the freedom from having to carry around cash, the hassle of looking for change and queuing simply to pay for parking,” said Sitoyo Lopokoiyoit, Chief Financial Services Officer, Safaricom.
The service is already available at more than 52 KAPS locations including in Nairobi, Kisumu, Eldoret, Mombasa, Nanyuki and Nakuru.
Customers using the Lipa Na M-Pesa 1Tap card to pay for their parking will get their entire parking fee back for the first three transactions they make.
The service will enable customers to make parking payments after viewing their bill before making the payment in the second step.
Tapping cards for payments
In this partnership, customers will also be able to use their M-Pesa 1Tap cards in place of the KAPS card to access and exit parking lots.
“KAPS has been on a journey to drive cashless parking payments and we are glad to partner with Safaricom in this initiative,” said Bonnyventure Saronge, Chief Executive Officer, KAPS.
He added, “The move complements the prepaid KAPS A-card Tap in Tap out service, which has been in the market for some time and has been well received by our customers.”
Cashless payments will also benefit parking service providers by reducing the point of failure associated with cash machines and the need to collect and transport cash from parking points.
Mobile money’s projected rise in Africa
More than half of the world’s mobile money services are in Africa making the continent ideal for mobile money inventions.
The McKinsey Global Banking report released in February last year projects that mobile money is the retail banking’s next growth frontier.
While the global banking industry is experiencing sluggish growth, the contrast is happening in Africa.
Markets in the continent are fast growing and nearly twice as profitable as the global average with still much room to grow, according to the McKinsey report.
“Africa’s retail-banking penetration stands at just 38 per cent of GDP, which is half the global average for emerging markets,” the report says.
This means that the African market will continue seeing some growth as some banks are already tapping the opportunities presented by challenges like widespread use of cash and poor coverage of credit bureaus.
“In terms of size, Africa’s current banking market is approximately USD 86 billion in revenues before risk cost. Our projected growth for Africa’s banking-revenue pools of 8.5 per cent a year between 2017 and 2022 will bring the continent’s total banking revenues to USD 129 billion,” adds the report.
Africans becoming bankable
The report also projects that many more Africans are becoming bankable.
“Another notable feature of Africa’s banking landscape is the staggering growth in the number of people becoming banked. As of 2017, there were almost 300 million banked Africans, up from 170 million in 2012.”
McKinsey projects that this figure will reach 450 million by 2022, meaning that close to half of Africans at that time will be banked, compared with just more than one-third today.
The mobile wallet segment is growing year on year within Africa and institutions like Xpress Money are looking to double its mobile wallet operations in Africa in the first half of 2019.
You can also read how Kenyans are transacting almost Sh2 Trillion every 3 months on mobile phones about Swedish fintech Okapi, Ecobank partnering for Africa’s unbanked while Amazon shoppers in Kenya to pay in local currency and the 5 Apps for sending money 2019.