August 18th, 2025

The landscape of merchant payments in Kenya has undergone a dramatic transformation between 2021 and 2024, revealing a clear shift from traditional cash-based transactions toward digital payment solutions. While cash is still widely used, mobile money has made massive inroads. FinAccess data on daily expenses and monthly expenses payment patterns reveals fascinating insights on people’s most frequent channel used to pay for their expenses.

Mobile money growth

In 2021 most people used cash most frequently to pay for their daily expenses such as food and transport. Cash used to be almost universal at 94.9% while mobile money was at 5.1%.  By 2024, cash usage for these transactions had fallen to 72.1%, while mobile money surged to 27.7%. For monthly expenses such as rent, utilities, and school fees, the transformation has been even more striking. In 2021, mobile money and cash were used equally 49.0% and 49.2%, respectively. In 2024, and mobile money has taken a commanding lead at 68.0%, while cash has dropped to just 31.7%. (Figure 1)

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Figure 1: Most frequent method used to make daily expenses; monthly expenses (16+)

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Cash declining dominance

Looking at people who make both daily and monthly payments reveals an interesting mix of habits. In 2021, about half of these individuals (48.0%) relied solely on cash, while only 5.3% used mobile money alone. By 2024, mobile money-only users had jumped to 30.7%, and cash-only users dropped to 27.1%. Many consumers around 41.8% still combine cash and mobile money. Bank-based combinations have almost vanished, reflecting the limited appeal of traditional banking for everyday merchant transactions. (Figure 2)

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 Figure 2: Most frequent method used to make both daily expenses and monthly expenses (16+)

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Mobile payments to banks accounts

Not all mobile payments end in mobile wallets. Kenya’s robust payment ecosystem, especially tools like tills (e.g. Lipa na M-Pesa Buy Goods) and Paybill numbers have created seamless rails where payments made via mobile can land directly into bank accounts. This means that while mobile money is the dominant channel, the destination of funds also includes the formal banking system. In practice, a customer may pay via M-Pesa, but the merchant receives the funds in their bank highlighting a deeper financial integration.

The global shift

These shifts in Kenya mirror a broader conversation about digital person-to-business (P2B) payments across Sub-Saharan Africa, as highlighted by the latest Global Findex 2025 data. Globally, 42% of adults made a digital payment to a business in 2024, up from 35% in 2021. In low- and middle-income countries (excluding China), this figure is 24%. In Sub-Saharan Africa, it is just 20%, despite the region leading the world in mobile money adoption. In Kenya, the figure is at 55.8%, Uganda, (11.7%) and Tanzania at (3.9%)[1].

Conclusion

Mobile money is rapidly overtaking cash for monthly expenses and is making significant inroads into daily spending as well. Cash is still relevant, especially for small, frequent purchases, but its share is shrinking year by year. The rise of mobile money reflects growing smartphone penetration, wider merchant acceptance of digital payments, and increased consumer trust in electronic transactions.

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[1] Hillary Miller-Wise et al., ‘Breaking the Cash Habit: The Urgent Need to Accelerate Digital Merchant Payments | Blog | CGAP’, 29 July 2025, https://www.cgap.org/blog/breaking-cash-habit-urgent-need-to-accelerate-digital-merchant-payments

 

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