Kenyans are cutting back on the use of mobile money agents, with transaction values dropping to their lowest level in nearly three years as households grapple with rising living costs and shrinking disposable incomes.
According to data from the Kenya National Bureau of Statistics (KNBS), the total value of transactions handled by telco and bank-linked agents fell sharply in February 2026.
Agents processed Ksh633.35 billion during the February, down from Ksh699.64 billion recorded in January. This marks the lowest transaction value since April 2023, when it stood at Ksh615.25 billion.
The figures capture transactions conducted directly through mobile platforms including person to person transfers, paybill payments, and merchant tills but exclude physical cash deposits and withdrawals at agent outlets.
The decline reflects changing consumer behavior as more Kenyans opt to pay directly via mobile phones for everyday expenses such as transport fares and groceries. This shift has reduced the need for cash withdrawals and, in turn, reliance on agent services.
At the same time, banks are intensifying competition in the digital payments space long dominated by MPesa by introducing lower transaction fees and expanding mobile-based financial services.
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Analysts say the slowdown also signals reduced consumer spending power. Many households are scaling back on non-essential purchases, while businesses report weaker transaction values despite continued activity on digital platforms.
The squeeze on incomes has been exacerbated by increased statutory deductions. The latest phase of higher contributions to the National Social Security Fund (NSSF) took effect in February, requiring workers to remit an additional Ksh2,160. This brings the maximum monthly contribution to Ksh4,320 up significantly from Ksh1,080 in 2022 and Ksh200 in earlier years.
These increases come alongside other deductions, including the housing levy and social health insurance contributions, further tightening household budgets.
Despite the dip in overall transaction values, Kenyans remain active users of digital financial platforms. However, many are making smaller, more frequent transactions and focusing spending on essential needs.
The trend echoes earlier patterns where users split payments into smaller amounts to manage costs and avoid higher transaction fees. Businesses, particularly those dependent on high-volume, low-margin transactions, are also feeling the impact of subdued consumer demand.
Mobile money has remained central to Kenya’s financial system since the launch of M-Pesa in 2007, evolving into a comprehensive ecosystem that supports transfers, bill payments, savings, and credit services.
By Obegi Malack
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