Kenya has become a worldwide model of digital payment where mobile money penetration is approximately 91 by mid 2025 and subscriptions to mobile money are 47.7 million on a population of about 56 million. This ubiquitousness, which M-PESA has led together with Airtel Money and T-kash, has transformed phones into first-line wallets to transfer persons-to-persons, pay to merchants, pay utility bills, save, lend and remittance.
What’s powering the shift
- First: mobile money M-pesa processes tens of millions of transactions each day, and anchors most daily payments; it is complemented by cards, QR and app-based wallets in cities.
- Interoperability reforms: National Payments Strategy 2022-2025 at the Central Bank of Kenya required wallettowallet and merchant till interoperability between M-PESA, Airtel Money, and T-kash and reduced friction and cash-outs between networks.
- Real time Rails- a new Fast Payment System to be implemented in 2025 will focus on 24/7 instant payments between people, businesses and government and integrations such as PesaLink-to-mobile wallets will interlink bank accounts and mobile money at high speed.
The impact so far
- Financial inclusion: The existence of dense network of agents and minimal onboarding has provided payments accessibility to a large fraction of rural and informal populations, thereby enhancing the resilience of these sectors to traditional bank branches.
- SME digitization: Merchant till interoperability streamlines small business acceptance and increases customer reach reducing the necessity to handle cash.
- Partnership Flywheel Partnerships have now commoditized overdrafts (Fuliza), BNPL (Faraja), virtual cards, insurance, and cross-border remittances into mobile ecosystems, furthering cashless commerce.
Remaining challenges
- Cost and literacy disparity: In rural settings, transaction payments, variable agent liquidity, and less digital literacy continue to lure the uptake of cash in specific applications.
- Fragmentation risk: Multiple rails and providers may imply the disparities in user experience; the pursuit of interoperability and SupTech regulation in Kenya is an attempt to minimize these frictions.
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What it means for consumers and businesses
To consumers: More instant and low friction payments, cross-network experiences, and the growing range of financial services payments made directly into mobile wallets.
To businesses: Simpler multi-rail acceptance (tills, QR, links), more data to credit and risk score, and wider customer access – particularly to SMEs who are digitalizing their sales and collections.
To investors and builders: A mature regulatory landscape with rails (mobile money, PesaLink, FPS), that have high user penetration provides a testbed to fintech products: embedded finance, cross-border remittances and treasury products.The next stage of Kenya depends on the implementation of instant-payments infrastructure, further integrating bank-wallet interoperability, and reducing costs at the last mile, which would establish it as the model market in Africa of inclusive, real-time, and high-scale digital payments.
