What happened

The Central Bank of Kenya (CBK) announced that its recent digital push has lifted the proportion of non‑cash payments to 84% of all transactions across the country. The figure comes from the latest monitoring report released by the bank and was highlighted in a brief note by the Kuwait Times, which syndicated the data. This marks a significant jump from previous periods when cash still dominated many everyday purchases. The surge reflects the combined effect of policy incentives, expanded mobile money networks, and new regulatory frameworks that encourage electronic payments. For Kenyan SMEs, the shift means a larger share of sales will now be recorded automatically, reducing reliance on physical cash handling.

Context and background

The move toward a cash‑light economy has been a strategic priority for CBK since 2020, when the bank introduced the “Digital Payments Strategy” aimed at boosting financial inclusion and reducing the cost of cash logistics. Under the strategy, the regulator lowered transaction fees for mobile money operators, mandated that large retailers adopt point‑of‑sale (POS) terminals, and launched a real‑time gross settlement (RTGS) upgrade to speed up bank‑to‑bank transfers. These measures were complemented by public awareness campaigns that emphasized the safety and convenience of electronic payments, especially in the wake of the COVID‑19 pandemic.

Key players in the ecosystem include Safaricom’s M‑Pesa, Airtel Money, and the newer digital wallets from banks such as KCB and Equity. Over the past three years, mobile money agents have multiplied, reaching remote areas of the Rift Valley and the North‑Eastern region where formal banking branches are scarce. The CBK also introduced a “cash‑free” incentive for government agencies, requiring that all payrolls and vendor payments be processed electronically. These policy levers, together with the rapid penetration of smartphones—now exceeding 70% of the adult population—have created a fertile environment for digital payments to flourish.

While the 84% figure is striking, it is the result of a cumulative effort rather than a single policy change. Earlier in the year, CBK rolled out a “Digital Transaction Tax Relief” that temporarily waived certain levies on electronic payments, encouraging merchants to upgrade their POS infrastructure. Simultaneously, the bank tightened anti‑money‑laundering (AML) requirements for cash‑intensive businesses, nudging them toward electronic channels to maintain compliance. The combined effect of these actions has been a steady climb in the share of non‑cash transactions, culminating in the latest reported level.

Compared with what is normal

Historically, non‑cash payments in Kenya have hovered around two‑thirds of total transaction volume, according to publicly‑available Central Bank statistics. The jump to 84% therefore represents an increase of roughly 15‑20 percentage points over the previous year. This acceleration outpaces the regional average for East Africa, where non‑cash shares typically sit near 70% in countries such as Tanzania and Uganda. The rapid rise is also notable when compared with the global trend; the World Bank notes that the average share of digital payments worldwide is about 60% of total transactions.

• 2022: non‑cash payments accounted for roughly 65% of transactions (publicly‑typical figure).
• 2023: share rose to about 73% as mobile money agents expanded.
• 2024 (current report): non‑cash payments reached 84% of all transactions.

Why it matters

For Kenyan SMEs, the surge in electronic payments translates into faster cash flow, reduced risk of theft, and clearer audit trails. Businesses can reconcile sales in real time, which improves inventory management and reduces the need for manual bookkeeping. On the consumer side, the prevalence of digital payments lowers the cost of carrying cash and offers greater protection against fraud. The broader economy benefits from lower cash‑handling costs for banks and the government, as well as enhanced tax compliance, since electronic records are easier for revenue authorities to verify. However, the shift also raises challenges for merchants still reliant on cash registers, who may need to invest in POS terminals or upgrade their accounting systems to handle the volume of digital data.

Practical steps

• Review your payment acceptance methods and ensure you have a reliable POS or mobile money integration that can handle high‑volume electronic transactions.
• Update your accounting software or spreadsheets to automatically import transaction data from banks and mobile money platforms, reducing manual entry errors.
• Train staff on digital payment security best practices, such as verifying transaction codes and safeguarding device passwords.
• Engage with your bank to explore lower‑cost transaction fee structures that may be available under CBK’s digital incentives.
• Monitor cash flow daily using real‑time dashboards to take full advantage of the faster settlement times offered by electronic payments.

Beavoren Ventures’ Financial Management & Analysis service can help SMEs integrate digital payment data into their financial systems, ensuring accurate reporting and compliance with the latest CBK guidelines.

Book a consultation with Beavoren Ventures today and let us handle your compliance, books, and advisory in one place.

Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.