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Internet banking subscribers up 8.9%

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By Taonga Sabola:

The number of subscribers for internet banking services rose by 8.9 percent in the fourth quarter of 2018 to reach 136,235, latest statistics from the Reserve Bank of Malawi (RBM) have shown.

The jump comes at a time authorities have engaged an extra gear in promoting digital payment platforms as the country attempts to embrace a cashless regime.

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In its National Payment Systems report for the fourth quarter of 2018, RBM says, despite the jump in subscription, the number is only about 7 percent of the total banked customers suggesting that internet banking is still not a widely used form of digital banking service which can partly be explained by the limited penetration of internet access amongst the population.

“Nonetheless, and reflective of the increase in total number of subscribers, both volume and value of internet banking transactions rose by 7.0 percent and 30.8 percent to 508,644 and K379.0 billion, respectively.

“The magnitude of the total value signifies the potential that this platform has in terms of processing significant amounts of transactions. Also this is a reflection of the fact that a significant proportion of internet banking subscribers are corporate institutions who tend to process transactions of relatively high value,” RBM says.

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It further notes that, in the fourth quarter, the number of mobile banking subscribers rose by 37.7 percent to 892,641.

This represents 44.6 percent of banked customers which is a more pronounced statistic if compared to the corresponding proportion of seven percent for internet banking subscribers.

Similarly, both volume and value of mobile banking transactions increased by 3.0 percent and 2.8 percent to 6.5 million and K72.1 billion, respectively.

The central bank adds that, despite the mobile banking platform registering almost 6.5 times the number of account-holders on internet banking platforms, at K72.1 billion, the total value processed was 5.3 times less than the value processed on the latter channel.

“This reinforces the point that corporate subscribers drive the value on internet banking. The higher number of subscribers on mobile banking also reflects the fact that most individuals in Malawi are more comfortable using mobile than internet banking, as the former’s USSD communication channel does not require internet access and is also available from any type of phone.

“This contrast in usage patterns for internet and mobile banking would be a useful perspective for commercial banks and other stakeholders if they wish to identify a particular digital payment channel to focus on based on their clientele profile and strategic objectives,” the report says.

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