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Kenya’s mobile money landscape is undergoing a significant shift as M-PESA experiences its fifth consecutive quarterly decline in market share. Increased competition from Airtel Money and growing industry interoperability are key factors reshaping the sector.
Shifting Market Dynamics
According to recent data from the Communications Authority of Kenya (CA), M-PESA’s market share dropped by 2.3 percentage points to 91% in Q4 2024, while Airtel Money strengthened its position, rising from 7.6% to 8.9% during the same period. This trend underscores the increasing willingness of consumers to explore alternative mobile money platforms.
Airtel Money’s growth is fueled by aggressive promotional strategies, including transaction fee refunds as airtime and lower service charges. For instance, sending KES 1,000 ($7.7) to other networks costs KES 11 ($0.085) via Airtel Money, compared to M-PESA’s KES 13 ($0.093). Similarly, cash withdrawals for the same amount are KES 2 cheaper on Airtel Money.
Expanding Accessibility and Competitive Pricing
To further enhance its market reach, Airtel Money has expanded its agent network through partnerships with major retailers such as Naivas, offering more convenient deposit and withdrawal points. While M-PESA still dominates with over 160,000 agents nationwide, Airtel Money’s strategic partnerships are increasing its accessibility.
Regulatory developments could further reshape the competitive landscape. The Central Bank of Kenya (CBK) previously committed to implementing agent interoperability by 2024, allowing customers to use any mobile money agent regardless of their service provider. However, this initiative remains delayed. Additionally, the CBK’s upcoming Fast Payment System (FPS) aims to enable seamless transactions between banks and mobile wallets, potentially reducing M-PESA’s dominance.
The Future of Kenya’s Mobile Money Ecosystem
Despite the growing competition, M-PESA remains the market leader, boasting over 34 million users and processing an estimated KES 40 trillion ($308.8 million) in transactions. However, Airtel Money’s continued market penetration signals a potential shift in Kenya’s mobile money sector, setting the stage for increased competition and innovation in digital payments.
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