NAIROBI, Feb. 27 (Xinhua) -- Mobile money and agency banking have eclipsed the use of automated teller machines (ATM) in Kenya, pointing to a near-end of the gadget that redefined east African nation's banking in the 1990s.
The two services, introduced in Kenya in 2007 and 2014 respectively, have become the later-day ATMs in Kenya, with millions of citizens turning to them.
Banks have consequently been forced to reduce the number of ATMs across Kenya, with the number of the machines falling to six-year-low at the close of 2019, data seen from Central Bank on Monday shows.
It is a twisted change of fortunes for the ATMs in Kenya, whose usage remains high in the developed world.
There were 2,459 machines at the end of 2019 in Kenya, with the number declining by 70 during the year. The last time the number of machines stood at such a level was in February 2014, the year when Kenyan banks launched agency banking.
Kenyans transacted 4.35 trillion shillings (43.5 billion U.S. dollars) on mobile money in 2019, the highest since the launch of the technology in 2007.
The money was transacted by 235,168 mobile money agents, the apex bank data shows, a number that is incomparable to the 2,459 ATMs,
The 42 commercial banks in the East African nation and five micro-finance institutions have contracted over 60,000 agents to transact their services, with the number of the traders rising considerably driving the nail further in the coffin of ATMs.
On Monday, at a shopping complex in the central business district in Nairobi, an ATM booth that belongs to a leading bank stood next to three mobile money agency shops.
Some of the agents, besides offering mobile money services, are banking agent making their shops busy. However, the booth remained just that, with the bank having removed the cash-dispensing machine inside.
"It was removed last year October because of low traffic to it but they are yet to carry the booth," said an agent identified as Ann.
It is the fate of most ATMs across the east African nation as Kenyans transact banking services on mobile phones and banks seek to cut costs by pushing their services online.
Bernard Mwaso of Edell IT Solution in Nairobi noted that ATMs are facing the fate of many other gadgets including phone booths, which were overtaken by new technologies.
"I can compare the fate of the ATMs in Kenya to that of phone booths, which were pushed out by mobile phones. Mobile money in particular guarantees convenience because one not only accesses the services on their phones but also next door when it comes to making deposits," he said, adding that ATMs don't offer convenience because they are located in fixed locations.
All Kenya's 42 banks have linked their services to mobile money, making customers have no reason to visit ATMs because they can withdraw cash from their accounts via mobile phones and spend it virtually.
"We conducted a survey and found that most customers prefer self-service digital banking and have a higher preference for convenience in payment platforms and access to loans," James Mwangi, the chief executive of Kenya's Equity Bank, said recently as he noted that ATMs have bleak future in their business model.
