The competitive dynamics in Kenya’s mobile money market are shifting as M-PESA, Safaricom’s flagship mobile payment platform, sees its market share decline for the fifth consecutive quarter. Data from the Communication Authority of Kenya (CA) reveals a 2.3 percentage point drop in M-PESA’s market share to 91% in Q4 2024. In contrast, Airtel Money continues to expand, experiencing a growth in market share from 7.6% to 8.9% during the same period.
Contributing to this shift is increased interoperability among mobile money services, which has simplified the process for customers switching between providers. Airtel Money has capitalized on this, attracting new users with aggressive promotions, including transaction fee refunds as airtime, and by maintaining lower transaction costs compared to M-PESA. For instance, sending KES 1,000 costs less on Airtel Money than M-PESA, and withdrawal fees are also more competitive.
Factors Behind Airtel Money’s Growth
- Increased interoperability among services.
- Aggressive promotions with transaction fee refunds.
- Lower transaction costs compared to M-PESA.
- Expanding agent network and partnerships with major retailers like Naivas.
Airtel Money’s growth is further supported by an expanding agent network and partnerships with major retailers like Naivas, providing more accessible points for cash transactions. Meanwhile, the Central Bank of Kenya’s (CBK) plans for implementing agent interoperability remain pending, which promises to allow users access to service agents from any provider.
Despite these challenges, M-PESA remains the dominant player with over 34 million customers and processing more than 30 billion transactions. However, upcoming developments, such as CBK’s proposed Fast Payment System (FPS), which aims to enable instant transactions across financial institutions, might introduce further competitive pressure on M-PESA’s leading position in the market.
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