Airtel Money, the mobile money service of Airtel Kenya, has made significant strides in the Kenyan market, growing its market share from 2.9% to 7.6% in the year to September 2024. This remarkable growth can be attributed to its strategy of offering free Airtel-to-Airtel transfers, lower fees for sending money across networks, and cheaper withdrawal charges compared to its main competitor, M-PESA.

According to data from the Communications Authority of Kenya (CA), M-PESA's market share declined from 97.0% to 92.3% during the same period, indicating that Airtel Money is steadily eating into its dominance. The CA reported that subscriptions to mobile money services increased from 39.8 million to 40.6 million, translating to a penetration rate of 78.9% during the reference period.

Airtel Money's aggressive pricing strategy has been a key factor in its growth. In 2020, the service eliminated charges for Airtel-to-Airtel transfers, making it a more attractive option for users. Additionally, sending KES 1,000 ($7.7) to other networks costs KES 11 on Airtel Money, compared to M-PESA's KES 13 ($0.093), while withdrawing the same amount costs KES 29 ($0.22) on Airtel Money—KES 2 less than M-PESA.

Another significant factor contributing to Airtel Money's growth is its expansion of access points. In 2024, the service partnered with supermarket chain Naivas to increase its agent network, addressing past concerns about its limited agent network. This move has improved the overall user experience and increased the service's reach.

The Central Bank of Kenya (CBK) has been pushing for full mobile money interoperability, which would allow users to access services at any agent regardless of their provider. While progress has been made in terms of sending money between networks and making interoperable utility and business transactions, agent interoperability remains unrealized, despite the CBK's pledge to implement it by 2024. This missing element sustains the dominance of larger players like M-PESA and hinders the growth of the mobile money ecosystem.

Despite this, the overall mobile money agency network has grown to over 365,000 agents, up from 347,700. The CBK's 2024 decision to increase the transaction daily limit cap from KES 300,000 ($2322) to KES 500,000 ($3870) has also supported Airtel Money's adoption, attracting high-value customers and businesses. Customers can now keep funds received from other wallets for over a week, eliminating the previous requirement to withdraw or have the money sent back to the sender.

The growth of Airtel Money is a significant development in Kenya's mobile money market, which has long been dominated by M-PESA. As the market continues to evolve, it will be interesting to see how M-PESA responds to the challenge posed by Airtel Money and whether the latter can sustain its growth momentum.