Safaricom earmarks $300 million for M-PESA upgrade as it marks 18th anniversary

Safaricom, Kenya’s leading telecommunications company, has announced a $300 million (KSh 40 billion) investment to upgrade its flagship mobile money platform, M-PESA, as it celebrates its 18th anniversary.

Launched in March 2007, M-PESA has grown from a pioneering mobile money transfer service in Kenya to Africa’s largest fintech solution, serving over 70 million customers across over 170 countries. The upgrade, dubbed “M-PESA 2.0”, is set to enhance system stability, capacity, and customer experience, reinforcing its position as a global leader in mobile payment services.

Peter Ndegwa, Safaricom Group CEO, unveiled the ambitious plan last week, emphasising that M-PESA 2.0 represents “the next big leap” for the platform. “By the time it’s fully rolled out, there will be zero downtime for customers. Safety and security are always our top priority,” Ndegwa declared.

He highlighted the company’s proactive measures to combat fraud and cyber threats, including the use of ethical hackers to rigorously test systems and the implementation of robust guardrails to maintain customer trust.

“We are constantly building resilience so customers can rely on our services with confidence,” he added.

M-PESA’s evolution over the past 18 years has been transformative. From its inception as a simple money transfer tool, it has expanded to offer a wide range of financial services, including payments, savings, loans, and investment products. The platform now supports over one million businesses and agents across eight African nations: Kenya, Ethiopia, Tanzania, Mozambique, the Democratic Republic of Congo, Lesotho, Ghana, and Egypt.

With a processing capacity of 4,000 transactions per second, the fintech handles about 100 million transactions daily, underscoring its critical role in driving financial inclusion and economic growth in Africa.

M-PESA’s developer hub, Daraja

The Daraja platform, M-PESA’s developer hub, has been instrumental in fostering innovation. Hosting over 100,000 developers and supporting more than 55,000 integrations, Daraja enables businesses to create tailored financial tools, from payment gateways to enterprise resource planning systems. This robust ecosystem has empowered the startup to remain at the forefront of fintech innovation, adapting to the needs of a rapidly digitising continent.

As part of its 18th anniversary celebrations, Safaricom launched the Ziidi Investment platform, featuring the Ziidi Money Market Fund. With over one million opt-ins since its November 2024 regulatory approval, Ziidi allows customers to invest starting from as little as $0.75 (KSh 100), with a daily limit of $3,750 (KSh 500,000).

The platform, which has already amassed over $45 million (KSh 6 billion) in funds, plans to introduce Shariah-compliant investment options to cater to diverse customer needs. This initiative aligns with Safaricom’s broader vision of expanding M-PESA’s digital financial services portfolio.

Esther Waititu, Safaricom’s Chief Financial Services Officer, emphasised the company’s commitment to scalability and reliability. “M-PESA’s future success will hinge on its ease of use and seamless integration with other services. Our goal is to provide customers with a comprehensive suite of financial services at their fingertips,” she stated.

Waititu noted that the $300 million (KSh 40 billion) investment will accelerate the development of new products, enhance platform stability, and support additional digital services, ensuring the payment platform remains a cornerstone of Africa’s financial landscape.

M-PESA’s impact on financial inclusion has been profound, particularly in Kenya, where it has increased penetration from 26.7% in 2006 to 83.7% in 2021. By FY24, the platform generated $1.05 billion (KSh 139.9 billion) in revenue, accounting for 42% of Safaricom’s service revenue.

Its success has also drawn attention from regulators, with the Central Bank of Kenya exploring options to separate M-PESA from Safaricom to enhance oversight. However, a potential $562.5 million (KSh 75 billion) tax liability has delayed these efforts, highlighting the platform’s significant economic footprint.

The M-PESA 2.0 upgrade comes at a time of increasing smartphone adoption and 3G/4G broadband penetration across Africa, positioning the platform to capitalise on the continent’s digital transformation. In 2021, M-PESA Africa introduced the Super App and the Business App, enabling businesses to operate virtual shopfronts through M-PESA Mini Apps. These innovations have strengthened the company’s role as a digital financial services provider, connecting customers and businesses to new opportunities.

To mark its 18th anniversary, Safaricom has launched a series of nationwide activities engaging stakeholders, including customers, investors, communities, technology partners, employees, regulators, and the media. These initiatives aim to reinforce M-PESA’s commitment to delivering a safe, secure, and worry-free financial ecosystem.

As Safaricom invests heavily in M-PESA 2.0, the platform is poised to continue transforming lives, empowering millions, and driving Africa’s digital economy for years to come.