M-PESA Faces Decline as Airtel Money Rapidly Expands its Market Presence in Kenya

M-PESA is experiencing a decline in market share as Airtel Money gains traction in Kenya’s digital wallet sector. Recent data indicates M-PESA’s market share is down to 91%, while Airtel Money rose from 7.6% to 8.9%. Factors contributing to this shift include Airtel Money’s lower transaction costs and strategic partnerships, enhancing accessibility. While M-PESA remains the market leader, Airtel Money’s growth strategies show promise for future competition.

The digital wallet landscape in Kenya is witnessing a notable shift, with M-PESA showing signs of decline while Airtel Money is rapidly gaining prominence. Mobile money services have become indispensable, particularly in regions where access to traditional banking is limited. Kenya, recognized as the birthplace of mobile money, is home to several platforms, including M-PESA, Airtel Money, SmartCash PSB, MoMo PSB, and Orange Money.

Traditionally, M-PESA, operated by Safaricom, has enjoyed a predominant market position. However, recent statistics from the Kenya Communications Authority reveal that M-PESA’s market share has diminished for the fifth consecutive quarter, declining by 2.3 percentage points to 91% in Q4 2024. In contrast, Airtel Money’s share has increased from 7.6% to 8.9%, marking a significant achievement for the newcomer, which launched in Kenya just three years ago.

Several factors contribute to M-PESA’s waning influence and Airtel Money’s ascent. Primarily, Airtel Money’s transaction fees are more competitive, charging KES 11 ($0.085) for sending KES 1,000 ($7.7) compared to M-PESA’s KES 13 ($0.093). Additionally, withdrawals are cheaper on Airtel Money, costing KES 29 ($0.22) compared to KES 31 on M-PESA. Furthermore, Airtel Money has enhanced its visibility through aggressive promotions and expanded agent networks.

Airtel Money’s strategy includes partnerships with supermarket chains such as Naivas to facilitate deposit and withdrawal services, improving accessibility for users. Although M-PESA leads with a network of over 160,000 agents across the country, Airtel Money’s strategic collaborations enhance its competitive standing.

This decline is not limited to M-PESA in Kenya. For instance, MTN’s MoMo PSB in Nigeria reported a loss of 2.5 million users in 2024 amidst various operational challenges. Revenue declines were also observed at MTN Nigeria, which experienced a drop from $4 billion in 2023 to $2.26 billion in 2024 due to currency depreciation.

Despite recent challenges, M-PESA continues to dominate the mobile payment landscape in Kenya, boasting over 34 million customers and processing transactions valued at approximately KES 40 trillion ($308.8 billion). While Airtel Money has around eight million registered users, its innovative approaches and market strategies are likely to boost its growth further.

In conclusion, the digital wallet sector in Kenya is undergoing a significant transformation as Airtel Money challenges M-PESA’s long-standing dominance. With competitive pricing and strategic partnerships, Airtel Money is steadily increasing its market share. As mobile money continues to play a crucial role in Africa’s financial landscape, both M-PESA and Airtel Money’s developments will be pivotal in shaping the future of financial transactions in the region.

Original Source: www.techloy.com