M-PESA is currently experiencing a decline in market share in Kenya, with its percentage falling to 91% as Airtel Money rises from 7.6% to 8.9%. The affordability of Airtel Money’s services and strategic partnerships are contributing factors to its growth. Overall, M-PESA remains the dominant service, but faces increasing competition from newer players in the market.
M-PESA, the subsidiary of Safaricom, is witnessing a gradual decline in its market share within the Kenyan mobile money sector, amid notable growth by its competitor, Airtel Money. Mobile money services have become integral for financial transactions in regions where traditional banking options are limited, particularly in Africa. With platforms like M-PESA, Airtel Money, and others, Kenya stands as the leader in mobile money innovation.
In recent reports from the Kenya Communication Authority, M-PESA’s market share dropped for the fifth consecutive quarter, falling by 2.3 percentage points to 91% as of Q4 2024. Conversely, Airtel Money experienced a rise, increasing its share from 7.6% to 8.9% within the same timeframe, highlighting its impressive growth since its entry into the market three years ago.
The decline of M-PESA can be attributed notably to its higher transaction costs. For instance, sending KES 1,000 ($7.7) costs KES 13 ($0.093) on M-PESA, while Airtel Money charges only KES 11 ($0.085). When withdrawing the same amount, Airtel Money charges KES 29 ($0.22), which is KES 2 less than M-PESA. Furthermore, Airtel Money’s aggressive promotional strategies and partnership with large supermarket chains, like Naivas, have significantly enhanced its agent network accessibility, challenging M-PESA’s dominance.
Globally, M-PESA is not alone in facing competition; in Nigeria, MTN’s MoMo PSB has seen a substantial drop in users, down by 2.5 million in 2024. MTN Nigeria’s revenue has also declined significantly, marking the first time it has lost its position as the group’s highest-earning subsidiary since 2019. Meanwhile, M-PESA continues to dominate in Kenya with over 34 million customers and managing over 30 billion transactions valued at approximately KES 40 trillion ($308.8 billion). Although Airtel Money has about eight million registered users, its growth strategy suggests it will continue increasing its market share.
In conclusion, while M-PESA remains the leading mobile payment option in Kenya, its significant decline in market share presents challenges, particularly with the ascendance of Airtel Money. This competitor, with its lower transaction fees and expanded accessibility, is attracting new users. As the digital financial landscape evolves, M-PESA must adapt to retain its customer base and address emerging competition more effectively.
Original Source: www.techloy.com
