Food businesses big users of mobile cash

DESIGN | LISA MUGUNDA

Hotels, restaurants and catering services have gained significantly from mobile money services, figures from a recently unveiled study on the use of technology shows.

The survey found that businesses in food services and accommodation both receive and make a bigger share of their orders using mobile phones than those engaged in other economic activities.

Of the 18 categories of enterprises surveyed for their use of ICT, food service and accommodation businesses were found to be the best users of mobile money and till number accounts, while businesses in information and communications were the best users of paybill accounts. Food service industries also received and paid out the highest proportions of their payments using mobile money.

In 2003, only 13 per cent of households owned any kind of telephone, according to the demographic survey. Nearly a decade and a half later, 86 per cent of all households in Kenya owned a mobile phone, according to the 2014 Demographic and Health Survey.

Over the same period, the share of households that owned a car stayed nearly constant at five per cent, those who owned a fridge only rose from four to six per cent and only three per cent of Kenyans owned a microwave in 2014.

While more households were able to acquire a television, with 35 per cent of households owning one in 2014 from 19 per cent in 2003, those who owned a radio dropped from 74 per cent to 68 per cent, no doubt partly due to the use of the mobile phone.

Over the same period, the share of households owning motorcycles increased more than tenfold from less than 1 per cent to 7 per cent. Conversely, those who reported owning a bicycle fell from 29 per cent to 21 per cent.

The findings on mobile phone use are contained in the recently unveiled ICT Enterprise Survey Report 2016. Of the 4,000 businesses targeted, 3,530 or 88 per cent, responded and just over half (54 per cent) were in Nairobi.

The survey found that 86 per cent of all businesses have a dedicated mobile phone. However, only 40 per cent of small businesses in horticulture do. Large businesses in electricity, gas, steam and air conditioning as well as arts and entertainment have virtually no dedicated mobile phones.

The business where mobile phones are most used to receive orders is accommodation and food services, involving hotels, restaurants and catering, where 90 per cent use them, followed by arts and entertainment (86 per cent), manufacturing (85 per cent), wholesale and retail trade (84 per cent) and administrative support services (77 per cent).

PAYBILL AND TILL

These same industries are also the biggest users of mobile phones in placing orders. Food and accommodation service businesses use mobile phones to the most (82 per cent), followed by wholesale and retail trade (79 per cent), manufacturing (77 per cent) and administrative and support services (74 per cent).

Despite the growth of mobile banking, financial and insurance service businesses are among those who use mobile phones least to receive orders at, 56 per cent. Mobile money accounts are extensively used across businesses to allow traders to receive and send money.

More than three quarters of all businesses had a mobile money account. The hotel, restaurant and catering businesses were the best represented, with 88 per cent of them having a mobile money account, followed by human health and social work (85 per cent), financial and insurance companies (78 per cent) and wholesale and retail trade (76 per cent).

Unlike mobile money accounts, mobile payment accounts are used exclusively to receive money. Pay bill numbers are used to identity a client who has an account with a business, while till accounts are extended to facilitate immediate purchase of goods and services. Only 25 per cent of all businesses had paybill accounts, while an even smaller share, 16 per cent, had till accounts.

Information and communication services, followed by education services, health and transport and professional scientific services were the biggest users of paybill services. Accommodation and food service businesses were by far the biggest users of till numbers at 34 per cent, followed by arts entertainment and recreation (22 per cent) and wholesale and retail trade (21 per cent).

MOBILE BANKING

Companies that have mobile money accounts and mobile payment accounts tend to use them heavily. Overall, companies with mobile money received 79 per cent of their payments and made 74 per cent of their payments using these platforms.

Economic activities that received the smallest share of their payments using mobile money include agriculture, forestry and fishing and financial services (both 57 per cent), professional technical and scientific services and real estate services (both 64 per cent) and water supply, sewerage, waste management and remediation activities (66 per cent).

The largest user was food and accommodation businesses, which received the highest share of their payments (90 per cent) through mobile money, while making 83 per cent of their payments the same way.

Businesses in the arts received 86 per cent of their payments but only made 64 of their payments this way. Businesses in manufacturing and wholesale and retail trade both received a five per cent bigger share of payments than they themselves made using mobile money.

Mobile banking services are yet to be adopted widely. Large businesses are the best adopters and micro businesses the worst, with 35 per cent and 26 per cent respectively using them. The financial sector, as expected, is the best user of mobile banking services with 43 per cent using them, followed by enterprises in education (39 per cent), accommodation and food services (35 per cent).

The worst users of mobile banking are in real estate (20 per cent) and agriculture, forestry and fishing (23 per cent).