Use of electronic cards to make payments is gaining momentum in the country with data for the 11 months to November 2012 showing a 73.3 per cent increase.
However, in a reflection of Kenyans aversion to credit, a majority of the deals were through debit cards unlike in other economies where credit cards are the norm.
In its latest update, Central Bank says shoppers spent Sh98.25 billion by November paying for goods through Point-of-Sale (POS) machines against Sh56.69 billion spent in 2011.
In total, the value of transactions carried out using cards whether through POS, online or transaction done through the Automated Teller Machines — rose by 57 per cent during the period to Sh907 billion over the same period from Sh577 billion in 2012.
A majority were done through debit card with credit card transactions trailing at a paltry Sh5.30 billion. This, according to experts, is a reflection of the sustained discomfort with which Kenyans approach debt.
“Typically, Kenyans are very wary of debt. Historically, our laws have not always been very humane when it comes to debt recovery and most of them want to avoid that trap,” said Consumer Insight researcher director Ndirangu wa Maina. Growth in card transactions was mirrored by an expanding network of Automated Teller Machines (ATMs) and POS machines.
During the period under review, the number of ATMs in the country increased to 2,224 from the 2,186 reported in November 2011.
The number of POS machines also increased to 16,703 from 16,320.
The number of cards in the country grew to 10.6 million by November 2012 from 9.6 million reported in November the previous year.
Despite this positive trend, players in the industry note that electronic payments, especially over the Internet, are yet to attain their potential in Kenya.
Part of the explanation for this lies in concerns over fraud especially given recent security breaches at one of Kenya’s largest banks.