Mobile money values drop to near three-year low as incomes shrink

A  drop in mobile money transaction values has exposed growing strain on household finances, with February recording the weakest activity in nearly three years as consumers cut spending and adjust to rising deductions.

Official figures show Sh633.35 billion was transacted through mobile platforms during the month, a sharp decline from Sh699.64 billion in January, 2026.

The latest data from the Kenya National Bureau of Statistics places February’s performance as the lowest since April 2023, when transactions stood at Sh615.25 billion.

The numbers capture payments made directly through mobile channels such as person-to-person transfers, merchant payments, and paybill services, excluding cash handled by agents.

The downturn comes as Kenya’s payment habits continue to evolve. More users are settling everyday expenses, including transport fares and basic shopping, straight from their phones. This growing shift is reducing reliance on agents for withdrawals, gradually changing how money moves across the economy.

Banks are also stepping up their presence in digital payments, an area long dominated by telecom operators. By introducing lower transaction costs in some cases, they are attracting customers and increasing competition within the space.

Even as digital usage remains widespread, the drop in value signals that consumers are transacting less money. Many households are scaling back on non-essential purchases, while businesses are recording lower transaction sizes despite steady activity levels on mobile platforms.

The trend points to shrinking disposable income, largely driven by increased statutory deductions that have cut into take-home pay. Workers are now dealing with multiple mandatory contributions, including pension payments, housing levy, and social health insurance, all introduced or expanded in recent years.

“We have observed a notable drop in purchasing power. Part of this is attributed to an increase in NSSF deductions under Phase four of the 2013 Act, which came into effect on February 1, 2026,” Ken Gichinga, Chief economist at Mentoria Economics, said.

The latest phase of contributions to the National Social Security Fund has raised the amount workers set aside for retirement. From February, employees are paying an additional Sh2,160, bringing the maximum monthly contribution to Sh4,320. This is a steep rise compared to Sh1,080 in 2022 and far above the earlier level of Sh200.

These higher deductions are tightening budgets at a time when incomes are already stretched. As a result, consumers are becoming more cautious, focusing on basic needs and limiting larger or optional expenses.

The data also suggests a shift in behaviour, with users increasingly breaking payments into smaller amounts to better manage costs and avoid higher charges tied to larger transactions.

For businesses, the impact is becoming more visible. Lower transaction values point to softer demand, especially in sectors that depend on frequent, small payments through mobile channels.

Mobile money remains a key pillar of Kenya’s financial system since the rollout of M-Pesa in 2007, enabling fast and convenient transfers, bill payments, and access to financial services. Over time, these platforms have grown into broad ecosystems serving millions and processing vast sums each year.

However, the latest figures underline a changing reality, where economic pressure and new spending habits are shaping how much money moves through mobile platforms, even as their importance in daily life remains strong.