THE number of payment cards in Kenya has risen to over 12 million following the issuance of debit cards by commercial banks, new official data showed Wednesday.
The Central Bank of Kenya (CBK) data indicated that as of the end of August, the number of debit cards stood at 11.8 million, up from 10.9 million at the end of the first quarter and 11.5 million in the first half of the year.
The marginal growth is due to the issuance of Mastercard and Visa (EMV) debit cards that are secure, and can be used for a myriad of functions.
Unlike debit cards, credit cards remain unpopular in Kenya with analysts attributing this to citizens being risk averse. The number of credit cards as of the end of August declined to 185,875 from 187,765 in July and 207,929 in June.
Other payment cards that increased during the period are the prepaid cards, which rose from 183,694 in July to 206,579 as of the end of August. And the number of these cards could rise significantly when Kenya moves to cashless fare system starting December 1, 2014.
However, despite the growth in number of payment cards, use has stagnated.
As of the end of August, the value of transactions done with debit cards since January stood at $9 billion, while the use of credit cards since January stood at a paltry $72 million.
Analysts have blamed the stifled use of payment cards in the East African nation to mobile money.
With over 22 million subscribers, mobile money has taken over the bulk of cashless transactions in Kenya, making it hard for payment cards to thrive.
“The faster growth of mobile money due to ease of use and accessibility has locked out other systems of payment from the Kenyan market. Debit cards cannot grow in such an environment,” economics lecturer Henry Wandera noted in a recent interview.
Kenya’s mobile money use top $2.32 billion per month. As of the end of August, according to CBK, Kenyans had transacted 1$7. 2 billion on mobile money.