Dominance of cash, especially for small value transaction, continues to stand in the way of Safaricom Ethiopia’s payments business using its M-Pesa platform, says the telco.
“Banking penetration in urban areas is relatively high but 99 percent of small value transactions are in cash,” Safaricom Plc, which is the majority owner of the Ethiopian business, told investors of the subsidiary’s performance last month.
Safaricom Ethiopia launched the mobile money service on August 15, 2023 and had acquired 1.1 million customers at the end of September. In that period, the value of transactions reached Ksh43.7 billion ($29.13 million) while active merchants stood at 12,400. The telco earned Ksh7.2 million ($48,000) from the mobile money platform.
According to a 2021 report by the World Bank on financial inclusion and digital payments, cash in Ethiopia is a dominant payment method, a sharp contrast to other markets in the region, including Kenya, where non-cash payments have gotten a foothold.
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