Bank transfers, cheque payments fall Sh765bn

Bulk payments made through real-time bank transfers and cheque payments dipped Sh621.8 billion and Sh143.73 billion respectively or a combined Sh765.53 billion in April and May amid Covid-19 economic hardships.

The value of transactions cleared and settled through the Real-Time Gross Payment System (RTGS) and the Kenya Electronic Payments and Settlement System fell to Sh4.65 trillion in the two months from Sh5.27 trillion in a similar period a year earlier.

These are electronic bank transfers above Sh1 million that mainly include supplier payments and settlement of deals such as property purchase.

Central Bank of Kenya data also shows the value of cheques – cleared at the Automated Clearing House under the Kenya Bankers Association (KBA) — fell by a third, or Sh143.73 billion, in the two months.

This saw the value of cheque deals drop to Sh310.75 billion in April and May when Kenya imposed movement restrictions to limit the spread of coronavirus.

Payment via RTGS and cheques require clients to visit banking halls to fill and sign off forms.

KBA chief executive Habil Olaka said 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.

“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.”

Kenya’s private sector activity declined sharply from April as businesses reeled from the impact of the coronavirus.