Why Banks Are Shutting ATMs: A Brief Analysis
A new report reveals that Kenyan banks close down a record number of Automated Teller Machines (ATMs) in the 2022 Financial Year.
According to the Kenya Financial Sector Stability Report published in September 2023, 65 ATMs ceased operations in 2022.
The number of operational ATMs fell from 2,366 in December 2021 to 2,301 in December 2022, a decrease of -7%.
The report attributes the decline to the rise of mobile money payment channels, which have become the preferred method for undertaking transactions, including receiving salaries.
In contrast, the number of ATM cards issued during the period increased.
“The number of cards and point-of-sale (POS) terminals increased slightly in 2022,” the report stated in part.
“However, the number of Automated Teller Machines (ATMs) declined to 2,301 in December 2022 from 2,366 in December 2021, signalling increased uptake of digital payments devices.”
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According to the report, the adoption of point-of-sale stations in supermarkets and other enterprises led to an increase in the number of ATM cards processed.
The point of sale (POS) is the location where a customer pays for products or services. Many Kenyans prefer using ATM cards or mobile money to complete transactions.
During the course of the survey, customers argued that the fees associated with swiping cards or making mobile money payments were lower than those associated with withdrawing currency from ATMs and then paying with cash.
During the past decade, mobile money transactions have steadily increased as an increasing number of Kenyans, including those in rural areas, have acquired smartphones.
In 2022, mobile money transactions reached a record high of Ksh7.9 trillion, and the number of new money agents reached 19,711.
Why Banks Are Shutting ATMs: A Brief Analysis
