Whatsapp Pay VS Mpesa – YKT Business Review

After Food, Shelter & Clothes; Mpesa is almost a basic need in Kenya.

For all those who are not aware of what Mpesa is, it’s an app that allows Kenyans to make payments and send money through their mobile phones. It’s technology that has existed in the country for over a decade now, and even the least digital person knows how to use Mpesa. It’s integrated in the day-to-day Life of all Kenyans, even those abroad.

With the launch of Whatsapp Pay in India and Brazil, Young Kenyans in Tech began having an interesting conversation as to whether Whatsapp Pay can compete strongly with Mpesa.

Disclaimer: At the end of the day we don’t have access to all the data that can help us come to an accurate conclusion, what we can do however is to share our opinions backed up with data we can find online.

Can Whatsapp Pay Compete Strongly with Mpesa?

_The news of SafeBoda exiting the Kenyan market was unexpected and also untimely in the wake of the economic recovery from the aftermath of COVID-19._ Ashley Mutiso's Take! Business Development Consultant (2).png

WhatsApp, a Facebook-owned messaging app, rolled its payment service to 400 million Indian users.

In Africa, WhatsApp is the leading messaging app in countries like; Kenya, South Africa, Nigeria, and  Ghana.

According to  Digital 4 Africa, there are over 8.8 million active social media users in Kenya, with WhatsApp and Facebook as the major platforms.

WhatsApp has not launched in any country in Africa, but I bet they have plans to allow users to pay for goods and services directly from the platform.

Now, will WhatsApp Pay compete with M-Pesa when it launches in Africa, or Kenya, to be specific?

Let’s run down the numbers;

 According to Vodafone, M-Pesa is now in 7 Africa countries; Kenya, DRC, Lesotho, Egypt, Mozambique, Tanzania, and Ghana.

M-Pesa has 41.5 million active customers as of 2019.

In Kenya alone, mobile money  subscribers are now more than the population at 58.4 million, where M-Pesa  has 88% of the subscribers, according to the Communication Authority of Kenya ( CAK)

Most mobile money users in Kenya have more than one phone number, which results in these vast numbers, one majorly being for business usage and the other for personal use.

Recently, Safaricom plc, M-Pesa parent company, started an incubator dapped Alpha to expand its M-Pesa product offering. 

Later the team launched a WhatsApp competitor app Bonga which was later renamed Zwuup with in-built M-Pesa payment capabilities.

However, there seem to be challenges in getting users to switch from WhatsApp to Zwuup. Again, the team is falling out, with Alpha’s senior leaders like Kamal Bhattacharya and Houston Malande leaving.

Whether Zwuup will succeed or not is uncertain. But WhatsApp has a first-mover advantage in messaging app with over 2 billion users globally, while M-Pesa is leading in mobile money payments not only in Kenya but in Africa. 

WhatsApp Pay doesn’t need to compete M-Pesa in payments to succeed. I believe a well- structured partnership would work, and everybody wins.

WhatsApp works only when online, but M-Pesa works offline as well. Smartphone users in Africa are 250 million and increasing.

M-Pesa can be the default banking partner for WhatsApp Pay, just like the partnership in India with the likes of  Jio Payments Bank.

In the age of cryptocurrency like Calibra by Facebook, users will want to convert their digital wallets into local currency easily and withdraw from a local M-Pesa agent conveniently. 

Finally, I believe a partnership is the best way, but Facebook will need to keep its promise for data privacy if such a deal gets struck.

Link: Okerosi Davis


Facebook constantly looks for new ways to innovate its platforms as seen through the new mode of payment called Whatsapp Pay. Whatsapp boasts of about 2 billion users worldwide, posing as potential customers for this platform. However, when it comes to Kenya, it isn’t straightforward because of the mobile money giant i.e MPESA. According to CAK, the number of mobile money subscriptions stands at about 29.1 million with MPESA maintaining the highest market share of about 98.8% while contributing to about 6.3% of Kenya’s GDP. One might compare these figures with the 22.8 million internet users in Kenya and think that there is a chance for real competition but there are factors to consider such as the actual number of social media users that stands at 8.8 million

MPESA was built to fulfill a need in the society, that was financial inclusion, to bank the unbanked by offering them a platform that was accessible to them and didn’t have any hidden charges, terms, and conditions. It created a feeling of belonging, hence its success across rural and urban Kenya. Whatsapp Pay requires a bank account and a bank card to work, you can guess how many people it has just locked out seeing that usage of traditional bank accounts has dropped from 32% in 2016 to 30% in 2019

Despite the fact that WhatsApp relies heavily on its encryption system, a lot of local users don’t know that fact, they aren’t familiar with the terminology, so they might be skeptical about trusting a social media site to carry out transactions especially with no immediate customer service to contact in case transactions go wrong as opposed to MPESA that has about 160,000 agents countrywide and an easy to use ussd code to cancel a transaction.

However, there are opportunities for it to thrive: 

Online businesses often use WhatsApp as a means of communication and they may embrace this mode of payment as they interact with the younger generation that is more tech-savvy and willing to adapt to new technology. However, they will have to compete with the Lipa na Mpesa platform that has about 170,000 merchants registered already.

Another opportunity is the flow of diaspora remittances. As of 2020, remittances to Kenya stood at $2.9 billion, this could prove to be an easy way to ensure that money is sent quickly and conveniently across borders. 

Whatsapp Pay will have to put up a good fight to occupy a share of this market, but it also has to innovate to match the needs and capabilities of Kenyans.

Link: Ashley Mutiso

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