Kenya’s ATM Withdrawals Plunge 84% as Cashless Economy Accelerates

As ATM transactions fall to just 3.2 million a month from more than 20 million at their peak, Kenya’s financial system is being rewired in real time. The value of ATM withdrawals is down to $260 million a month while more than $840 million flows through bank-to-bank digital platforms and billions more circulate through mobile money networks. Kenya’s financial system is undergoing a structural shift away from cash, forcing banks to rethink everything from card usage to physical infrastructure as transactions, liquidity and customer behaviour migrate decisively to digital channels. However, in South Africa, the case is different.

The use of automatic teller machines (ATMs) in East Africa’s biggest economy has fallen to its lowest level since the central bank began tracking transactions, reflecting a rapid shift toward digital payments. In February, customers carried out 3.2 million ATM transactions, down sharply from more than 20 million a month at the peak in 2012.

The decline underscores how mobile money and digital banking have reshaped everyday commerce. Customers can now move funds instantly from bank accounts to mobile wallets and pay for goods and services without ever handling cash.

“We are back to the peak that we achieved during Covid when people wanted to only transact digitally,” said James Mwangi, the chief executive of Equity Group Holdings, 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.”

The shift accelerated in 2020, when health authorities promoted cashless payments to limit the spread of Covid-19. The government and telecom operators backed the move with discounted transaction fees, encouraging millions of users to adopt digital alternatives. Even after restrictions were lifted, the change endured.

Kenya now has a record 91.3 million registered mobile money accounts and more than 500,000 agents, according to industry data. By contrast, the number of ATM cards in circulation has declined more gradually, to 10.7 million in February 2026 from a peak of 16.2 million in early 2019.

The mismatch suggests that while customers continue to hold cards, they are using them less frequently. ATM transactions have fallen to roughly one eighth of their peak level.

“It is a factor of culture. The culture of using cards is not ingrained in us, unlike the Western market, where they view cards as money. For us, cards were introduced as access to money,” Francis Mutonyi, a financial consultant with Goldplus Advisory told the Business Daily newspaper. “Banks are hoping that the use of prepay cards by high school students will instill a new culture of using cards.”

Prepaid cards have grown rapidly, rising nearly fourfold over the past five years to 1.95 million. Schools have been a key driver, with many requiring students to use cards instead of cash. The cards are also increasingly used for online payments, including subscriptions to services such as Netflix, as they limit exposure to fraud by holding only preloaded funds.

Banks are trying to expand card usage beyond withdrawals. “The banks have to push for the use of cards at the point of sales (POS) because currently it is mainly at petrol stations and upper-end establishments,” Mutonyi said. Monthly card transactions at point of sale have hovered between 5 million and 5.5 million over the past 18 months.

‘Tap and Go’ is the New Way

Lenders including KCB Group, Guaranty Trust Bank and Standard Chartered have introduced contactless “tap and go” cards to make payments easier, while reducing the time it takes to issue new cards.

At the same time, banks are rethinking their physical infrastructure. Kenya had 2,257 ATMs in February 2026, down slightly from a year earlier. Some lenders are expanding cash deposit machines instead, allowing businesses and mobile money agents to deposit funds outside normal banking hours.

The total value of ATM transactions has also declined, falling to about $260 million in February, a six year low. The drop has been slower than the fall in transaction volumes, suggesting that the average withdrawal size is increasing.

Fees remain part of the equation. ATM withdrawals typically cost about $0.23, while mobile money transfers above roughly $75 and up to about $1,900 are charged between $0.75 and $0.83, depending on the amount.

Banks have responded to competition from telecom operators by building their own digital rails. One example is Pesalink, which allows instant transfers between bank accounts. Usage has been rising quickly, with monthly transaction values reaching about $840 million, up 41 percent from a year earlier.

The broader trend is clear. As mobile money and digital platforms continue to expand, the role of cash and the machines that dispense it is steadily shrinking, even in a country where ATMs once defined access to banking.

South Africa Remains a Card Economy

The contrast with South Africa is striking. While Kenya’s ATM economy is shrinking in value, South Africa’s largest lenders are not dismantling their cash infrastructure, as Impact Newswire previously reported. Instead, banks such as Standard Bank, Absa, First National Bank, Capitec and Nedbank are upgrading machines, adding self service features and embedding ATMs into a broader cash ecosystem that includes supermarket partnerships.

Rather than retreating from physical banking, South African institutions are recalibrating it. Customers can withdraw and deposit cash at retail chains like Shoprite and Pick n Pay, extending access points. A 12 percent drop in machines between 2020 and 2025 reflects consolidation rather than abandonment, with lenders prioritising efficiency, security and smarter devices over sheer footprint.

Standard Bank has said it will not close ATMs in 2026, opting instead to replace 600 ageing units and deploy several new technology enabled machines, underscoring a strategy that treats cash as a persistent, if evolving, part of the financial system.

“In addition, we will also install 200 new technology ATM devices and bring banking services closer to our customers,” it said. “Our ATM network strategy is part of our broader distribution strategy that enables safe, convenient, and affordable access to cash and other self-service banking services for our customers.”

The divergence highlights two distinct trajectories. In Kenya, mobile money has effectively displaced cash as the dominant medium of exchange, pushing ATMs toward obsolescence. In South Africa, where card usage is more deeply embedded and retail infrastructure more formalised, banks are redesigning rather than retreating from cash, betting that physical access will remain relevant even in a digital age.

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