The difference between M-PESA in Kenya and Ethiopia is shaping how Safaricom Ethiopia positions its fast-growing mobile money service, with CEO Wim Vanhelleputte saying the platform is filling a very different gap from the one it solved at home.
What Drives the Difference Between M-PESA in Kenya and Ethiopia
One of the most striking things first-time visitors notice in Addis Ababa is the cash. The biggest note is worth about Ksh200, forcing people to carry thick bundles of birr even for routine supermarket shopping. It is this inconvenience, not money transfer, that M-PESA is stepping in to solve.
This marks a clear difference between M-PESA in Kenya and Ethiopia. In Kenya, M-PESA transformed financial inclusion by connecting people with and without bank accounts. It pushed the banked population from 27 percent in 2006 to about 85 percent today.
In Ethiopia, however, access to banking is not the problem. With around 30 banks and more than 8,250 branches and ATMs, most Ethiopians already have access to formal financial services.
“We are not solving the money transfer problem,” said Safaricom Ethiopia CEO Wim Vanhelleputte. “What we are solving in Ethiopia with M-PESA is digital payment replacing cash with digital transactions.”
Launching M-PESA Without a Massive Telco Base
Another difference between M-PESA in Kenya and Ethiopia lies in the timing of its rollout.
In Kenya, M-PESA launched seven years after Safaricom began operations, tapping into a large and loyal subscriber base. In Ethiopia, the journey is very different M-PESA was launched just seven months after Safaricom Ethiopia switched on its network.
“The starting point is very different,” Wim said. “You don’t have, yet, a big telecom base that you can offer M-PESA services to. Launching telco and M-PESA at the same time is quite unique challenging, but not impossible.”
In Kenya, the original use case was clear: safe and reliable money transfer. “People used to send cash in envelopes on buses from Nairobi to Kisumu,” he recalled. “That pain point does not exist in Ethiopia.”
Solving a New Pain Point: Digital Payments
Safaricom Ethiopia believes relevance is what will make M-PESA successful.
“If you want to be successful with a new product, you must solve a real customer pain point,” Wim said. “In Ethiopia, that pain point is replacing cash payments with digital payments.”
Already, a third of M-PESA’s 10.8 million Ethiopian customers are using digital channels. The company is now pushing customers to shift from USSD to the M-PESA app.
“Using a smartphone to do USSD doesn’t make sense,” the CEO said. “Once you’re hooked to the app, there’s no going back.”
This growing digital familiarity combined with Ethiopia’s large banking network is helping customers quickly adjust to mobile payments.
What’s Next: Fuliza, Savings, Loans, Insurance
Wim says the potential is enormous. Ethiopia’s population is nearing 125 million, with 2.5 million young people turning 18 each year.
“We are leapfrogging,” he said. “We are doing in 18 months what took 18 years in Kenya. I’m committed and convinced that M-PESA will become our success story in Ethiopia.”
Safaricom Ethiopia customers will soon access additional services including Fuliza, longer-term loans, savings products and insurance.
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