Commercial banks' Automated Teller Machines (ATM) in Kenya are on fast decline as citizens switch to mobile phone technologies to transact banking business. For several years, the machines were all the rage when it came to bank customers accessing their cash and in some cases depositing. But all indications are clear that mobile phone technology is slowly cannibalizing the machines as citizens seek more convenient, faster and trendy ways of accessing their money. And they have found it in their mobile phones, forcing nearly all East African nations' 42 banks to launch vibrant mobile and internet banking platforms. Consequently, the commercial banks have slowed down investment in the teller machines mainly found in commercial centres. Latest data from the Central Bank of Kenya indicate that there are currently about 2,600 ATMs across the East African nation, down from an estimated 2,800 seven months ago. The number of the machines has been on the decline since the start of the year, but dropped drastically in April to average 2,600 machines. Central Bank attributes the trend to increased use of mobile technology by banks and their customers. "This has been driven mainly by stiff competition among the institutions, which have had to adopt cost-effective channels in offering financial services to ensure efficiency and maintain market share," said the regulator. With Kenyans transacting on mobile money 2.8 billion U.S. dollars a month, which translates to 92 million dollars every day or 3.8 million dollars per hour, banks have had no choice but to link their systems with those of telecoms which offer mobile money services. The result is that citizens now do not need to go to ATMs to withdraw or deposit cash. "When I want to withdraw money from my bank account, which is linked to my mobile money account, all I need to do is to transfer money from the former to the latter on my cell phone. Then I walk to the nearest mobile money agent and withdraw the cash if need be," said Nairobi insurance agent Joseph Omolo. If he wants to pay rent, for instance, Omolo normally withdraws cash from his bank account via his mobile money, logs in to his mobile money account and sends to his landlord. "Initially, I would have had to look for an ATM, withdraw the cash physically and load into my mobile money account," he recounted. As millions of other Kenyans, Omolo who has been doing banking business on his phone for over a year now does not remember the last time he visited an ATM to withdraw cash. "As long as my bank's mobile banking app is working, which has not disappointed me so far, I do not think I will step to an ATM." However, increased mobile money use is not the only tormentor of ATMs, according to analysts. Henry Wandera, an economics lecturer in Nairobi, noted that with banks replacing ATM cards with debit cards, Kenyans do not have to withdraw money from the machines to spend. "They can use the cards directly at several pay points in paperless transactions that are convenient." He added that growth of agency banking has also made Kenyans visit ATMs less. By December 2015, 17 commercial banks and three microfinance banks had contracted 40,592 and 1,154 agents respectively across the country, who made transactions worth 4.3 billion dollars. Endit
The adoption of mobile banking services has dramatically reduced investment in Automated Teller machines ( ATMs ) in Kenya . The numbers of ATMs throughout the country has fallen sharply over the past seven months , as almost all of Kenya 's banks have taken to offering mobile banking services .