The value of mobile money transactions in Kenya has experienced a significant decline, falling by 19.6% over the 12 months to February 2025, according to new data from the Central Bank of Kenya (CBK). The total transaction value dropped from KES 790.8 billion ($6.13 billion) to KES 636.2 billion ($4.93 billion), marking the lowest monthly figure recorded in over a year.

Despite this decline, the sector's reach continues to expand, with the number of active mobile money agents increasing from 320,182 to 394,853, and subscriptions rising from 77.3 million to 84.6 million over the same period. However, the widening gap between usage and transaction value indicates a structural shift in how mobile money functions within the Kenyan economy.

Mobile money, which has been instrumental in expanding Kenya's financial inclusion since the launch of M-PESA in 2007, is now grappling with slowing household spending, intensifying competition from banks and fintechs, and changing consumer habits. The sustained fall in transaction value reveals deeper pressures, including rising living costs, which have squeezed household budgets, leading many to reduce non-essential mobile money use.

Although more Kenyans are signing up for mobile money accounts, many now transact smaller amounts or use their wallets less frequently. Growth in account numbers no longer directly translates to higher transaction volumes, reflecting the strain on household budgets and shifting money movement patterns. The agent network has expanded, especially in smaller towns, but this has reduced earnings per outlet, as transaction volumes are now split across more agents.

For higher-value transactions, such as rent payments, tuition fees, and business transfers, many Kenyans now prefer using bank apps or mobile banking platforms, reducing reliance on traditional mobile money. However, Safaricom's M-PESA remains dominant with a 91% share of the mobile money market as of December 2024, according to the Communications Authority of Kenya (CA). Airtel Money trails with an 8.9% share.

The decline in mobile money transactions has significant implications for Kenya's economy, as it may impact financial inclusion and access to essential services. The shift towards digital payments and online transactions may also lead to a reduction in cash-based transactions, potentially affecting small businesses and informal economies. As the sector continues to evolve, it will be crucial to monitor these trends and adapt to changing consumer behaviors and preferences.

In conclusion, the decline in mobile money transactions in Kenya serves as a reminder of the need for fintech companies and policymakers to adapt to shifting consumer habits and economic pressures. By understanding these trends and addressing the underlying causes, Kenya can continue to promote financial inclusion and drive economic growth.