M-PESA’s Market Share Slips as Airtel Money Gains Ground

Safaricom’s M-PESA, Kenya’s dominant mobile money service, is facing its fifth consecutive quarterly decline, as Airtel Money continues to gain market share through aggressive promotions, lower transaction fees, and an expanding agent network.

The Numbers Behind the Shift

• M-PESA’s market share dropped by 2.3 percentage points in Q4 2024, settling at 91%, while Airtel Money grew from 7.6% to 8.9%, according to the Communication Authority of Kenya (CA).
• Kenya’s mobile money subscriber base grew by 4.1% to 42.3 million users, indicating increasing competition for new customers.

Why is M-PESA Losing Ground?

1. Airtel Money’s Competitive Pricing

Airtel Money remains the cheaper alternative:

• Sending KES 1,000 ($7.7) to another network costs KES 11 ($0.085) on Airtel Money vs. KES 13 ($0.093) on M-PESA.
• Withdrawing KES 1,000 costs KES 29 ($0.22) on Airtel Money, KES 2 less than on M-PESA.

2. Aggressive Promotions and Interoperability

• Airtel Money refunds transaction fees as airtime, making it a more attractive option.
• Increased mobile money interoperability since 2022 has made it easier for customers to switch between providers.

3. Expanding Agent Network

• Airtel Money is partnering with supermarket chains like Naivas to host deposit and withdrawal points.
• M-PESA still dominates with over 160,000 agents, but the Central Bank of Kenya (CBK)’s proposed agent interoperability could level the playing field.

What’s Next for M-PESA?

• Despite the decline, M-PESA remains dominant, with over 34 million customers, handling 30 billion transactions valued at KES 40 trillion ($308.8 million).
• However, CBK’s planned Fast Payment System (FPS) could further intensify competition by enabling instant transactions across all financial institutions, including banks and PSPs.
• As Airtel Money continues its push for market share, Safaricom may need to adjust its pricing strategy and expand incentives to maintain its lead.