Cards turn out to be
favourites during
Black Friday

Despite facing difficult economic times, with the inflation rate at 9.6 percent, Kenyans are known to shop for bargains, especially during the Black Friday phenomenon every November. This ushers the festive December season with an anticipated sales boom that rides on reduced prices in retail stores, e-commerce sites and open-air impromptu bazaars.

From food items, latest phones and furniture to tiles and shoes, retailers and consumers look to make a killing during this period where customers hardly dig any deeper into their pockets but have eyes glued on new announcements of price cuts and new product arrivals sweetened with the free delivery value add.

According to the Central Bank of Kenya (CBK) latest report, the number of ATMs, ATM Cards and Point of Sales (POS) machines increased drastically, with a 43.3 per cent increase registered in acquisition of bank cards from 229,856 debit cards as at September 2020 to 760,917 debit cards in September 2022 and a further two percent rise registered on credit cards that stood at 325,574 during the same period.

While previously the sector experienced slow uptake of e-payments, the pandemic accelerated the use of digital solutions as online shopping gained momentum. Payments were facilitated via digital channels, with e-shopping and e-payments now becoming an accepted lifestyle across all classes of people. This eventually prompted lenders to facilitate back-office integration allowing cashless transactions for purchases and payment for services received.

Absa has continuously redeveloped its card business footprints and rethought its solutions in response to these market demands. A good example is the vertical contactless card that the bank launched in the Kenyan market two years ago at the height of the COVID-19 pandemic. This service allows customers to make contactless payments via tap-and-go service on enabled Point of Sale (POS) machines.

A 2021 Mastercard study on consumer spending revealed that nearly four out of five consumers in Kenya are shopping more online since the onset of the COVID-19 pandemic, with data, mobile gadgets, apparel, healthcare, banking, and other fast-moving consumer goods recording the highest surge of online activity.

With Kenyans fearing contracting COVID from handling cash, 3,821 more businesses acquired POS machines, an 8.3 percent rise that saw active POS machines rise to 49,786 as at September 2022.

Today, shoppers are rapidly moving away from traditional payments and opting for contactless and digital transactions, efficiency, convenience, and security features. Even cooked food is delivered to homes and offices, with payments made seamlessly online and via card payments.

According to Central Bank of Kenya (CBK) data, using bank cards to shop for goods and services recorded 4.4 million transactions as of May 2022, a sharp rise from 676,275 transactions in August 2014, mostly debit cards at point-of-sale terminals. Absa Kenya has registered a 20% growth on spend done on cards, and register an accelerated growth of 20k more POS users compared to pre- covid periods.

As Kenyan consumers look to benefit from reduced prices during the Black Friday sales, many shoppers prefer to use debit or credit cards as they are considered more secure and safer to use at supermarkets, fuel stations, pubs, restaurants, and other establishments. In a move to cushion customers coming from the difficult year, Absa Bank has partnered with local merchants such as online platforms Glovo, Uber and petrol stations to offer discounted offerings.

The inclusion of lenders in the sales craze has been a win-win game for everyone; since retailers make sales and customers get the goods they have yearned for. For businesses, using cards helps them reduce cash management costs since all payments are credited directly into the businesses’ accounts. It also makes accounting more accessible and results in fewer “missed purchases” since a lack of physical cash does not impede the conclusion of a sale.

The writer is the Head of Card Payments at Absa Bank Kenya PLC.