Safaricom Launches Mobile Money Service in Ethiopia

Kenyan telecommunications company Safaricom has launched its M-Pesa mobile payment service in Ethiopia.

Safaricom Launches Mobile Money Service in Ethiopia

According to media reports, the launch of this service in the second most populous country in Africa took place in August. Currently, M-Pesa has a limited geographical scope of application, but in September its availability will be significantly expanded.

Peter Ndegwa, executive director of Safaricom, said in a comment to the media that the full launch of the service in Ethiopia will take place before the end of next month. This statement should be interpreted as confirmation of the information that access to M-Pesa throughout the country will be provided by the end of next month. The company’s executive director also said that the firm develops technologies, creates products, and plans to integrate the service with a large number of banks.

Safaricom’s experience is notable because it is the first private telecommunications company operating in Ethiopia. Also in this case, special attention should be paid to the fact that in the mentioned country it is extremely difficult to obtain the approval of the authorities to carry out activities due to the system of strict state control over several industries, including banking. At the same time, Ethiopia is an important market for telecommunications companies in terms of prospects.

According to media reports, the excessive strictness of the system of state control in the second most populous country in Africa provoked an extremely negative situation, in which Ethiopia significantly lagged behind the pace of the so-called revolution of mobile money on the continent. Praveksha Maharaj, Director of MEA Partnerships at Entersekt, in July, during a conversation with journalists, noted that the breakthrough in the field of mobile financial services led to the fact that most Africans adopted advanced technology on a large scale and made a kind of transition into the future of the digital payment industry.

M-Pesa was launched in 2007. The emergence of this business solution had, in a certain sense, historical significance for the continent, since it significantly expanded access to financial services in Africa. Currently, there are more than 40 million active M-Pesa customers and over 500 thousand outlets interact with this service.

In Ethiopia, the first nationwide mobile payment service Telebirr appeared only in 2021. In August last year, the local fintech company Kacha Digital Financial Services became the first private company to be granted a license for mobile money by the national bank of this country.

The media claim that there is an unmet demand for mobile payments in Ethiopia. This is confirmed by the fact that within a week after the launch of Telebirr, more than 1 million accounts were registered on the platform. The late beginning of the history of Ethiopia’s presence in the mobile money market is due to the fact that until the end of last year, there was a ban on the creation and operation of mobile networks by private enterprises in the local telecommunications space.

The group headed by Safaricom, which is partly owned by British Vodafone, paid $850 million for a telecommunications license two years ago and another $150 million in May this year for a mobile money license to get a business opportunity in Ethiopia.

Peter Ndegwa says that the Ethiopian financial system is a space of prospects for providers of mobile money and services related to their use, since in this country many consumers need access to appropriate solutions.

As we have reported earlier, Clara Reportedly Launches Cross-Border Payments in Mexico.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.