Safaricom occupies 99.9% of the mobile money market

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Safaricom occupies 99.9% of the mobile money market

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Safaricom occupies 99.9% of the mobile money market


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A Safaricom employee demonstrates the M-Pesa money transfer service on a smartphone inside a mobile phone service center in Nairobi on November 22, 2018. PHOTO | AFP

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Summary

  • Data from the Central Bank of Kenya (CBK) shows that M-Pesa has increased its share of the value of mobile money transactions over the past three years to reach Sh2.206 trillion.
  • M-Pesa’s growth dented the market for Airtel Money and Telkom’s T-Kash over the period with their shares falling 0.2% and 0.1% respectively.
  • The CBK, in a presentation to Parliament, said that competition in the sector is being addressed through greater integration of competing platforms.

Safaricom #ticker: SCOM has increased control of the mobile money market to 99.9% thanks to the efforts of regulators to open its M-Pesa platform to interface with those of rivals Airtel Kenya and Telkom Kenya in an effort to strengthen competition in the field.

Data from the Central Bank of Kenya (CBK) shows that M-Pesa has increased its share of the value of mobile money transactions over the past three years to reach Sh2.206 trillion (99.9%) out of a total of Sh2. 208 trillion value of transactions in 2021.

M-Pesa’s growth dented the market for Airtel Money and Telkom’s T-Kash over the period with their shares falling 0.2% and 0.1% respectively.

Safaricom’s control of the market has prompted a push for regulatory changes initiated by its rivals who claim the telecom company is abusing dominance.

The CBK, in a presentation to Parliament, said that competition in the sector is being addressed through greater integration of competing platforms.

“Key initiatives for impacting the payments industry include large-scale interoperability to build on existing collaboration and progress towards the nationwide” pay anyone everywhere, “CBK presentation.

The regulator in 2020 published a draft regulation to allow users to withdraw cash from an agent of their choice regardless of whether they belong to Safaricom, Airtel or Telkom.

Airtel and Telkom subscribers will also be able to pay their bills through Safaricom’s Lipa na M-Pesa if the proposed regulations receive a parliamentary nod, marking the latest push to deepen financial inclusion in the country.

Safaricom has been uncomfortable with the push to open M-Pesa stores to rival companies.

Mobile money has grown over the years to become a profitable revenue stream for telecom companies as customers use it to send cash, pay for goods and services, and get short-term credit.

CBK data shows that Safaricom increased its control of the mobile money market from 99.7% in 2019 to 99.8% a year later.

Airtel Money recorded a drop in its share from 0.3% in 2019 to 0.2% a year later, while T-Kash grew from 0.004% to 0.006% over a similar period.

Since 2018, the subscribers of the three telecommunications companies have been sending money through mobile phone networks but can only withdraw cash from agents associated with the operator.

Airtel and Telkom have petitioned Parliament several times for the government to declare Safaricom the dominant player in the sector, paving the way for regulatory changes aimed at increasing their declining fortunes.

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