No more sweets as pocket change as Till numbers continue to dominate supermarket payments

After saving nine shillings on sale items, Atieno approached the supermarket counter with her shopping trolley full of household items.

Like the ping of a piggy bank, the counter swallowed barcodes and her bills went up on the console’s calculator.

When she checked out with crisp brown new Kenyan currency notes she had just fished from an automatic teller machine which are more perishable than a fish gills. The counter lady handed her nine low-quality orange syrup packed as sweets.

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She had shopped for candy for her children. But in Kenya, sweets of doubtable quality count as pocket change in supermarkets.

The alternative is to lure clients into philanthropy of a literal piggy bank for a worthy cause, a children’s home perhaps.

While a shiny shilling may not look as much, coins in Kenya are worth a whooping Sh9.4 billion according to central bank data for June 2020.

No wonder the Central Bank Governor was so angry when he first came to the market he made a decree to ban giving change in sweets.

But Kenyans and decrees. What has actually helped deal with this issue has not been orders from above, rather mobile payment systems.

With Till numbers entering the shopping isles customers now pay their exact bills and have sometimes eliminated physical pocket change.

Almost all shopping outlets from huge international retail chains to nondescript corner shops have introduced M-PESA till payment options.

This has not come without hiccups and challenges like delays in the counter as one makes payment or when clients are asked their numbers to confirm payments.

The ubiquitous use has however seen some of these teething problems overcome through enhanced and integrated system that quickly captures payment data and links to the counter being funded to make payment fast, simple and efficiently.

This mode of payment especially picked up after the coronavirus pandemic when transaction really shifted to mobile platforms.

First , telco giant Safaricom gave shoppers Bonga for Good an initiative launched on April 3 2020 as a package where users could redeem bonga points at the telcos merchants at one Bonga Point for Sh30 cents witnessed a redemption of 2 billion bonga points.

Cash strained Kenyans redeemed Sh400 million from Safaricom’s customer loyalty awards scheme mainly for basic food items during the height of the pandemic.

Then the banking regulator, Central Bank of Kenya (CBK) also scrapped charges for sending and receiving less than Sh1000 over mobile. Withdrawing this money attracted charges at agents so customers preferred spending on mobile.

CBK said that since the waiver was introduced ,the monthly volume of person-to-person transactions increased by 87 percent between February and October 2020.

Over this period the volume of transactions below Sh1,000 increased by 114 percent, while 2.8 million additional customers are using mobile money. Business-related transactions also recorded significant growth over the same period.

Even though the charges have been restored the move by Safaricom to cut low value M-Pesa transaction fees by up to 45 per cent is expected to keep Kenyans using mobile cash.

This is coupled by the fact that all transactions of Sh100 are still free and all M-PESA customers will continue to enjoy free transactions between M-PESA and their bank accounts.

The reduced tariffs will equally apply to transactions for micro-Businesses under the new Pochi La Biashara service, and for Lipa Na M-PESA businesses using the Transacting Till to make payments.

We cannot deny that cash is still king many still want the feel of paper in their hands.

However this trend may not last for long as growth of mobile money is growing at exponential rates.

In fact, mobile phone use is becoming important in understanding the Kenyan economy. Case in point is the review of inflation metrics as the Kenya National Bureau of Statistics (KNBS) discovered that increase use of mobile phone consumes the highest portion of Kenyan incomes toping the country’s monthly shopping basket.

This trend is facilitating an ever growing list of products that are shifting almost all forms of payment onto tailored mobile money solution.

From M-PESA to by products like Paybill numbers Lipa na Mpesa and the new Pochi la Biashara that allow small business owners to keep a separate wallet from their personal M-PESA line meaning the financial data will be solely for the business flows.

The Latest move by Safaricom to set up M-PESA Bill Management service targeting schools, landlords, utilities, and other businesses with repeat payments that offers a platform where they can present and receive pending payments from customers, and issue electronic receipts is a testament to this growing shift.

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