🌴 Mobile payments in Kenya🇰🇪: the secret behind the success of fintech company M-Pesa

🌴 Mobile payments in Kenya🇰🇪: the secret behind the success of fintech company M-Pesa

Below is an overview of how M-Pesa played a key role in the development of the online betting market across the region by creating a favorable environment for it.

⏩ What is M-Pesa? — M-Pesa (where “M” stands for “mobile” and “pesa” means “money” in Swahili) is a mobile payment service launched in 2007 by Kenyan telecommunications operator Safaricom in partnership with Vodafone. Its main services include money transfers between mobile numbers via SMS, mobile airtime top-ups, digital payments and microcredit services. The platform does not require users to have a bank account, credit history or proof of residence, which significantly expanded access to financial services.

⏩ Coverage: today M-Pesa operates in 7 African countries, and by 2021 the number of users had reached 50 million. Every year the company processes transaction volumes equivalent to almost three times Kenya’s total GDP.

⏩ Dominance: one of the main reasons for M-Pesa’s leadership in payments was the near-total dominance of Safaricom in Kenya’s telecommunications market.

⏩ Lending (main product line): in January 2019, Safaricom launched Fuliza, an overdraft service for M-Pesa users who run out of funds on their digital accounts. During the first month alone, Kenyan users borrowed more than 60 million USD through the service. Depending on the loan range, monthly fees could reach 60% of the borrowed amount. Six months later, the cumulative volume of microloans reached 800 million USD.

⏩ Gambling: by 2018, online betting in Kenya generated 2 billion USD annually. According to official data, this figure increased 100-fold over a period of 5 years. A survey conducted by GeoPoll showed that 96% of users gamble via mobile phones. This demonstrates the impact of reliable payment infrastructure. Direct integration with M-Pesa requires a local betting license; operators without one rely on aggregators.

⏩ Combined ecosystem: access to microloans and mobile betting within the same ecosystem. In order to reduce aggregator costs, Kenyan operators established SportPesa, a company focused on online gambling activities including sports betting and online casinos. Before temporarily leaving the Kenyan market in 2019 due to tax disputes, the company had already become a sponsor of English Premier League clubs. Later, MozzartBet, Betika and Betin built operations based on the same model.

⏩ Consumer protection: M-Pesa transactions do not appear in bank statements. In addition, betting account top-ups do not necessarily need to originate from the player’s own registered M-Pesa number. Third-party deposits are possible. However, users are subject to transaction fees.

⏩ Operator protection: mobile payments may create fragmented spending information across multiple platforms, complicating creditworthiness assessments. Nevertheless, this pushed operators toward more advanced use of real-time payment data, enabling faster identification of frequent betting activity on individual platforms.

⏩ Critical situations: when M-Pesa systems experience heavy traffic, for example during UEFA Champions League matches, failed deposits can lead to delayed callbacks, incomplete confirmations and reconciliation issues. However, responsibility for resolving these issues generally falls on operator support teams, rather than directly on Safaricom. Despite this, the market reach and conversion rates delivered by M-Pesa remain difficult to replicate on competing platforms.

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