Money Markets
Safaricom on Wednesday described betting as simply one of the many uses of the M-Pesa platform. PHOTO | FILE
By DAVID HERBLING and CHARLES MWANIKI
In Summary
The volume of cash moving through mobile money
transfer platforms grew by a fifth in the first six months of this year,
powered by increased uptake of cellphone-based gaming, industry data
shows.
A total Sh1.59 trillion moved through the mobile platforms
in the first six months of the year, according to Central Bank of Kenya
(CBK) data, signalling that consumers in East Africa’s largest economy
are on course to surpassing 2015’s full-year record of Sh2.81 trillion.
This means an average of Sh220.4 billion is moving
on mobile money platforms every month compared to Sh186.4 billion per
month in in a similar period last year.
Telecoms operators said transactions to bookmakers
have added impetus to mobile money’s steady rise since it was first
launched in Kenya nine years ago.
The betting industry has emerged as a major player
in the mobile money industry alongside retail payments, peer-to-peer
transfers, and diaspora remittances, according to telecoms operators.
Kenya now has more than a dozen betting and
gambling platforms and the list has continued to grow in recent months
as investors rush in to capitalise on the growing popularity of
bookmaking in the East African nation.
Mobile-based sports betting and gambling has
continued to grow, aided by the ease of placing bets online or through
SMS and paying via mobile money platforms such as M-Pesa and Airtel
Money.
“Betting transfers have been among the leading
Airtel Money transactions, especially over the weekends and when the
English Premier League is on,” said Adil El Youssefi, chief executive at
Airtel Kenya, said in an interview.
Airtel Kenya partnered with one of the betting
firms in March 2016, offering gamblers free deposit services to their
betting wallets as well as free withdrawals when transferring winnings
to their Airtel Money wallet.
Users, however, pay a fee when withdrawing cash from Airtel Money.
About five million Kenyans have taken up
mobile-based gambling — mostly sports betting and lotteries — according
to data from the Betting Control and Licensing Board, the industry
regulator.
The increasing appetite to gamble from the comfort
of one’s house or office pushed up the number of mobile money
transactions by more than a third to 708.6 million deals from 518.2
million in the first half of 2015.
Safaricom
chief executive Bob Collymore in May told Bloomberg that “sports
betting is using M-Pesa a lot,” adding that the sector had “absolutely
overtaken everyone else”.
Betting has now become a primary M-Pesa user,
alongside paying for shopping, utility bills (water, rent and
electricity), receiving company dividends and microloans.
Safaricom Wednesday described betting as simply one
of the many uses of the M-Pesa platform, adding that the majority of
betting-related transactions are small amounts, in the range of between
Sh20 and Sh100.
Low-denomination gamblers are, however, known to make
multiple bets, making it a lucrative activity for the telecoms operators
in the form of fees paid to the bookmakers’ paybill numbers.
Kenya has 40 million mobile money users who
transact across six major platforms — M-Pesa, MobiKash, Airtel Money,
Orange Money, Tangaza, and Equitel — backed by a network of 162,465
agents as at June.
Betway Kenya country manager Wanja Gikonyo said the
platform was “growing in leaps and bounds” but declined to reveal the
number of gamblers or volumes of cash involved.
Betin Kenya, owned by Coast-based Italian
millionaires Domenico Giovando and Leandro Giovando, in August notified
consumers of a new tariff of Sh22 for every deposit.
“As you may have heard, other bookmakers will be
charging on all deposits you make. Unfortunately, we now have to
introduce a Sh22 charge for deposits from Sh100-Sh300,” Betin Kenya said
in an email dated August 9, 2016.
This means that it costs Sh22 to deposit Sh100 to any betting platform’s M-Pesa paybill.
In the event of a win, gamblers also incur a standard fee that M-Pesa charges to withdraw a windfall.
The latest report by the Communications Authority
of Kenya says the growth of mobile money is also powered by school fees
payment as well as payment for goods and services.
Kenyans living, studying, and working abroad are
also fuelling the growth of mobile money by opting to send cash directly
to the mobile wallets of dependants, deeming this more secure and
convenient compared to using traditional agents.
hdavid@ke.nationmedia.com; cmwaniki@ke.nationmedia.com
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