Key questions this article answers?
  1. What tactics have Kenyan banks deployed to deliver more attractive merchant solutions than Safaricom?
  2. How will merchants respond to the Central Bank of Kenya’s new mobile wallet limits?

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.

Getting paid

M-PESA payment codes are common at checkout counters in Kenyan restaurants, bars,