Retail merchants are at the centre of a turf war between banks and Safaricom (M-PESA’s parent company) as they jostle for merchants to use their payment solutions.
Skirmishes between Safaricom and Kenyan banks aren’t new. Safaricom commands a $1.02 billion payments empire, and banks have tried (and failed) to wrestle market share from Safaricom. Payments on Pesa Link (banks’ alternative to M-PESA) still trail far behind M-PESA, at just 0.01% of M-PESA payments in 2020 (PesaLink: 2.07 million, M-PESA: 12 billion).
Still, banks aren’t giving up the fight. Merchants could be their second chance to stake a claim in Kenya’s payments market, and they’re determined not to miss out on the opportunity. Banks have certain advantages that pose a serious challenge to Safaricom this time. We’ll explore the competitive dynamics between Safaricom and banks to win Kenyan merchants.
M-PESA payment codes are common at checkout counters in Kenyan restaurants, bars,