M-PESA Ethiopia has reached five million customers who were active in the past 90 days, marking a sharp acceleration in mobile money adoption as competition deepens in Ethiopia’s fast-growing digital payments market.

The Safaricom-backed platform said its growth rate doubled over the past three months, driven by routine transactions such as transfers, merchant payments, fuel purchases, and bill settlements. Launched in August 2023, M-PESA is expanding in a market where digital wallets are increasingly central to everyday payments.

The platform now serves about 50,000 merchants nationwide, extending digital payments across both urban centres and rural areas. Transaction fees are capped at five birr, a level aimed at encouraging frequent, low-value use and reducing reliance on cash.

M-PESA offers services including person-to-person transfers, merchant and bill payments, airtime and data purchases, and short-term digital credit through Errif Be M-PESA. The credit product has attracted 1.6 million registered users, with the company reporting a high repayment rate.

In a move to broaden its reach, M-PESA recently launched a telco-agnostic service, branded M-PESA LeHulum, allowing customers to use the wallet regardless of their mobile network. The shift is intended to widen adoption beyond Safaricom subscribers, although the rollout has faced operational frictions, including temporary access challenges on some mobile data networks.

The platform is integrated with EthSwitch, the national payment switch, enabling transfers between banks and other digital wallets, as well as QR code payments. M-PESA is currently connected to 18 banks, supporting the government’s push for interoperability in the financial system.

New services are also being rolled out by sector. School fee and water utility payments are now available in Bahir Dar, Jimma, and Adama, with Addis Ababa expected to follow.

M-PESA’s expansion comes amid intense competition from incumbent players, notably Ethio Telecom’s Telebirr, which has built a far larger registered user base since its launch and remains dominant in volume terms. The crowded landscape is forcing newer entrants to differentiate through pricing, interoperability, and ecosystem partnerships rather than scale alone.

Beyond consumer payments, M-PESA is positioning itself as a platform for local innovation. Through its open API developers’ portal, about 2,500 developers have signed up, building more than 900 applications that connect to the wallet’s infrastructure.