M-PESA Gains Ground but Trails Telebirr in Ethiopia’s Mobile Money Market

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M-PESA Ethiopia reached 5 million 90-day active customers this week, marking its fastest period of user growth since entering the market in August 2023.

Activity on the Safaricom-backed platform has doubled over the past three months, driven mainly by everyday payments and an expanding range of services, as digital finance adoption accelerates across Ethiopia.

The milestone comes as competition in Ethiopia’s mobile money sector begins to intensify after an early period dominated by a single provider. M-PESA entered Ethiopia more than two years after state-owned Ethio Telecom launched Telebirr, which retains a large lead in users, distribution, and institutional integration.

While M-PESA remains smaller in scale, recent growth indicates rising competition in a market that was initially closed to private operators.

More than 50,000 merchants now accept the M-PESA nationwide, with transaction fees capped at 5 birr. The platform has focused on low-value, high-frequency payments, positioning itself around affordability and day-to-day use rather than large transfers.

Product uptake has accelerated alongside customer growth. Errif Be M-PESA, the platform’s digital microloan product, has reached 1.6 million users, with the company reporting strong repayment rates.

M-PESA has also extended its services beyond peer-to-peer transfers, rolling out School Pay nationwide and enabling utility payments for water services in Bahir Dar, Jimma, and Adama, with Addis Ababa planned next.

Despite this progress, Telebirr remains the dominant player. By late 2024 or mid-2025, Telebirr had about 53 million active users, supported by its integration within the national telecom operator.

Available data places M-PESA’s active customer base between about 3.5 million and 10.8 million between the end of 2024 and September 2025, depending on reporting periods and definitions.

Distribution continues Telebirr, with the platform operating more than 146,000 agents nationwide, compared with roughly 29,200 for M-PESA. Merchant coverage also differs, with Telebirr serving more than 144,000 merchants, while M-PESA’s network stands at about 119,500.

Telebirr is connected to 602 government institutions for public payments, whereas M-PESA remains in discussions with authorities on further digitisation projects.

M-PESA’s approach has centered on speed of growth and service differentiation. The company said its customer base more than tripled in the 12 months to December 2024.

It has also launched M-PESA LeHulum, a telco-agnostic application that works across mobile networks, targeting users outside Safaricom’s subscriber base and younger customers.

Interoperability is a core part of the platform’s model. M-PESA is connected to 18 Ethiopian banks through the EthSwitch national payment system, allowing transfers between bank accounts and mobile wallets.

The company is also expanding its developer ecosystem through open application programming interfaces, with about 2,500 developers building more than 900 applications.

Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.