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ATM use hits all-time low on shift to cashless banking
ATM usage in Kenya has fallen to record lows as mobile money and digital payments accelerate the country’s shift toward a fully cashless banking system.
The usage of automatic teller machines (ATMs) has dropped to the lowest level since the Central Bank of Kenya (CBK) began reporting the transactions, underscoring the impact of a shift to cashless banking.
There were, for instance, 3.2 million transactions conducted through ATMs in February this year, a sharp fall from peak figures in 2012 when more than 20 million transactions were processed monthly.
The introduction of digital payment platforms has heavily impacted ATM usage as customers seek convenience.
The ability to transfer money from bank accounts to mobile wallets has reduced the need for ATMs, with customers increasingly paying for goods and services directly from their phones.
“We are back to the peak that we achieved during Covid when people wanted to only transact digitally,” said Equity Group chief executive James Mwangi during a recent investor briefing.
“This digitisation is not led by the bank but by the customers, and you can see the channels that are driving this digitisation — mobile money.”
ATM use took a hit in mid-2020 owing to health protocols imposed to curb the spread of Covid-19, with authorities encouraging cashless payments.
The shift has persisted even after the lifting of the restrictions, with the number of registered mobile money accounts hitting a record 91.3 million and agents exceeding 500,000 in February.
Card paradox
Notably, the number of ATM cards issued has declined at a slower pace than transaction volumes, indicating banks are still issuing cards even as usage falls.
There were 10.7 million cards in circulation in February 2026, compared with a peak of 16.2 million at the beginning of 2019 – a 33.4 percent decline.
In contrast, transaction volumes have fallen to about an eighth of the 28 million peak, suggesting customers are holding cards but not using them.
“It is a factor of culture. The culture of using cards is not ingrained in us, unlike in Western markets, where they view cards as money. For us, cards were introduced as access to money,” said Francis Mutonyi, a financial consultant at Goldplus Advisory.
“Banks are hoping that the use of prepaid cards by high school students will instil a new culture of using cards,” he added.
Most high schools now insist on prepaid cards for students’ pocket money to reduce the use of cash.
Uptake of prepaid cards has grown nearly fourfold over the past five years to 1.95 million cards in February.
Customers also prefer prepaid cards for online transactions, including subscriptions for services such as Netflix, due to lower exposure to fraud.
POS limits
“The banks have to push for the use of cards at the point of sale (POS) because currently it is mainly at petrol stations and upper-end establishments,” said Mr Mutonyi.
Use of cards at POS has hovered between five million and 5.5 million transactions per month over the past 18 months.
Installation of POS machines remains costly for banks, limiting deployment compared with mobile money solutions that are easier for businesses to adopt.
Banks such as KCB, GT Bank and Standard Chartered have introduced tap-and-go cards using near-field technology to ease transactions.
Card processing has also been made faster, compared with earlier systems where customers waited up to two weeks due to centralised production.
There were 2,257 ATMs in the country as of February 2026, down from 2,267 a year earlier, with banks responding differently to the decline in usage.
Co-operative Bank increased its machines to 620 from 617, while Equity reduced its network to 328 from 345. Absa Bank added one machine to reach 204.
Banks are increasingly investing in cash deposit machines, which allow customers — especially businesses and mobile money agents — to deposit funds beyond normal banking hours.
Some machines are automated to ensure immediate reflection of funds in customer accounts.
Value trend
The value of ATM transactions has declined to a six-year low of Sh34 billion, a slower drop than transaction volumes, indicating a rise in average transaction value.
Mobile money transactions are charged on a graduated scale, while ATM withdrawals typically attract a fixed fee of about Sh30, regardless of the amount.
Banks also charge fees for transfers between bank accounts and mobile wallets, although some have waived charges to attract deposits.
To counter the dominance of telecoms in mobile money, banks developed the interbank transfer platform Pesalink.
Pesalink allows customers to move money between banks instantly, with usage rising steadily.
The value of monthly transactions on the platform has grown 41 percent year-on-year to Sh110 billion.
