July 28, 2020//-Banks payments made through cheques have dipped to a 10-year low of Sh154.56 billion in May on slowed economic activity and shift to digital platforms to lower risks of Covid-19 infections.
Central Bank of Kenya (CBK) data shows the figure has dipped in the two months, to approach the low levels of Sh148.09 billion that was last seen in August 2010.
The steep fall is in sharp contrast from the five-month peak of Sh222.4 billion that was moved through cheques in March–the same month in in which Kenya recorded the first case of Covid-19, heightening calls for customers to adopt digital payments.
The volume of cheques cleared at the Automated Clearing House under the Kenya Bankers Association (KBA) stood at 973,918 in May, a 36.4 percent fall from March figure of 1.531 million.
Kenya had imposed 7pm to 5am curfew in March forcing most banks to cut their operating hours as they directed customers to use self-service digital platforms.
The move was in bid to lower risks of Covid-19 infections by decongesting banking halls and also to allow staff to comply with curfew hours.
Payments via cheques and Real-Time Gross Payment System (RTGS) require clients to visit banking halls to fill and sign off forms before transactions can be completed.
A separate disclosure by CBK also showed domestic foreign currency cheque (DFCCs) has also dipped.
Dollar-denominated cheques dropped to Sh4.3 billion ($40.16 million) in April- the lowest since CBK started making this disclosure in 2011. This recovered slightly to $41.49 million in May.
Euro and British pound-denominated cheques also touched Sh127.93 million (€1.011 million) and Sh16.45 million (£0.13 million) in May- the lowest in 10 years.
KBA chief executive Habil Olaka said in recent interview that banks and customers have embraced digital payment platforms such as PesaLink to stem the spread of the global coronavirus pandemic.
PesaLink is an interbank mobile payment channel, which allows a maximum of Sh999,999 per transaction.
Banks announced waiver of costs involved in moving money from one bank’s digital wallet to another in bid to promote use of digital transactions and cut cash handling.
For instance, customers would try to push their transactions through platforms like PesaLink and so on, rather than RTGS, which will ordinarily require them to go to the bank and fill in the RTGS transfer form,” said Mr Olaka.
“The other thing could be that economic activity itself went down and because of that payment for affected activity also went down.”
