An M-Pesa user in Ethiopia on average spends Sh0.50 a month in transaction fees, dimming the power of the mobile money service to grow Safaricom’s profits.
Investor disclosures for the nine months ended December 2025 show M-Pesa revenue in Ethiopia stood at measly Sh12.2 million, translating to a monthly average of about Sh1.4 million from the active 2.36 million users.
This translates to an average user revenue of 50 cents, paling in comparison to the Kenyan monthly average of Sh374.83 in the year to March 2025.
Safaricom had hoped to emulate the success of M-Pesa in Kenya to drive profits in Ethiopia when a consortium it led paid Addis Ababa $150 million (Sh19.4 billion) for the mobile money licence.
But instead of sending money to family and friends via M-Pesa, subscribers in Ethiopia are using the mobile money platform to buy data and airtime -services that don’t attract transaction fees.
‘M-Pesa users in Ethiopia are mainly buying airtime products and data. 20 percent of the sales (bundles and airtime) go through the M-Pesa channel initiated by self-top ups,’ said Wim Vanhelleputte, CEO of Safaricom Telecommunications Ethiopia PLC, in a past interview.
Safaricom has previously acknowledged that cash remains the default payment instrument in Ethiopia, especially for small-value transactions -the very segment that powered M-Pesa’s early success in Kenya.
‘Banking penetration in urban areas is relatively high but 99 percent of small value transactions are in cash,’ the Nairobi Securities Exchange-listed firm said in a past investor briefing.
Kenyans generate significant revenue for Safaricom by actively using the platform for daily financial transactions, including person-to-person transfers, Lipa na M-Pesa payments, agent withdrawals and digital financial products like Fuliza overdrafts.
During the year ended March 2025, M-Pesa in Kenya generated Sh161.1 billion in revenue supported by a base of 35.82 million monthly active customers, making the platform Safaricom’s single most important business.
Mobile money accounted for 44.2 percent of the telco’s total service revenue that stood at Sh364.3 billion during the year, cementing its position as the company’s primary earnings engine.
The M-Pesa revenue contribution dominance was followed by that of voice at 22.2 percent, data at 20 percent, while messaging services contributed 3.4 percent during the period. In 2010, when M-Pesa was three years old in Kenya as it is in Ethiopia now, the monthly revenue per user averaged Sh79.
In Ethiopia, M-Pesa contributed just 0.13 percent of the total service revenue of Sh9.7 billion for the nine months ended last December, highlighting a stark imbalance between customer adoption and monetisation.
Data revenues accounted for 66.97 percent of Ethiopia’s service revenue at Sh6.5 billion during the period under review, followed by voice and messaging revenues which contributed 21.99 percent and 1.2 percent respectively.
A 2021 report by the World Bank on financial inclusion and digital payments showed that cash in Ethiopia remains an overwhelmingly dominant payment method for the population, a sharp contrast to other markets in the region, including Kenya where non-cash payments have gained a foothold.
‘Most people still rely on cash to pay utility bills and receive payments. Almost all adults at 99 percent pay utility bills with cash, compared to 12 percent of people in Kenya and 59 percent in the region as a whole,’ the report noted.
Kenya’s M-Pesa scaled rapidly after its launch in 2007 by riding urban-to-rural remittance flows, as workers in cities sent money to relatives in villages.
Safaricom launched M-Pesa in Ethiopia in August 2023 as part of a phased rollout strategy prioritising scale before monetisation.
At the end of the first full month of operations, the platform had acquired 1.1 million customers and recorded transactions worth Sh43.7 billion. However, early revenues from the mobile money platform stood at just Sh7.2 million, underscoring initial monetisation challenges.
Financial inclusion indicators have further constrained the scaling of digital financial services, as the World Bank report indicated that only 11 percent of Ethiopians have accessed a loan from a formal financial institution.
Many Ethiopians rely on informal savings groups, family networks or community-based arrangements for borrowing and saving.
Safaricom has positioned M-Pesa as a long-term infrastructure investment aligned with Ethiopia’s ongoing financial sector reforms.
In October last year, M-Pesa was integrated with EthSwitch, Ethiopia’s national payment switch regulated by the National Bank of Ethiopia, connecting the Safaricom-owned platform to more than 30 banks and wallets through a single interface.
This, the telco reports, has enabled real-time wallet-to-bank and bank-to-wallet transfers, reducing fragmentation in the payments ecosystem.
The integration has also enabled interoperable QR (quick response) payments, expanding acceptance across more than 50,000 M-Pesa merchants nationwide, as part of Ethiopia’s National Digital Payment Strategy 2026-2030 launched in December 2025. For M-Pesa, interoperability removes a key bottleneck that previously limited usefulness beyond closed-loop transactions.
Ethiopia’s large population positions it as one of Africa’s biggest long-term growth opportunities for mobile money. The country is Africa’s second-most populous market after Nigeria.
During the six months ended last September, a 59 percent contraction in Ethiopia losses helped raise Safaricom’s half-year profit 52.1 percent to Sh42.7 billion.
The Kenya business continued to be the main profit driver on the back of M-Pesa whose revenue rose 14 percent to Sh88.1 billion up from Sh77.2 billion in a similar period the previous year.