Airtel targets Kenya's small businesses as mobile money war shifts to merchants

As I stepped out of the bustling streets of Nairobi, I couldn't help but notice the vibrant entrepreneurial spirit that pulses through the city's veins. From the street vendors selling fresh produce to the boda boda riders zipping through the crowded roads, Kenya's informal economy is. It's a sector that employs over 14.9 million people, contributes between 30% and 34% of the country's gross domestic product, and accounts for more than 90% of private businesses. And yet, many of these entrepreneurs still rely on personal mobile money wallets to receive payments, making it difficult to separate business income from household expenses.

This is where Airtel Money Kenya comes in, seeking to deepen its customer engagement and challenge Safaricom's dominance in the mobile money market. With a 10.9% market share, Airtel has been steadily expanding its customer base through lower transfer costs, broader agent coverage, and partnerships with banks. The company now serves over six million customers through a network of 270,000 agents and over two million outlets. But the challenge has shifted from persuading customers to open wallets to making Airtel Money an integral part of how they run their businesses.

Merchant payments have emerged as one of the fastest-growing segments of Kenya's mobile money market, with Safaricom's Pochi la Biashara leading the charge. In the year ended March, the number of merchants using Pochi la Biashara more than doubled to 2.1 million, while revenue from the product rose 86% to KES 4 billion ($31 million). This growth has created an opening for rivals like Airtel, which is now targeting Kenya's small businesses with a new digital wallet called Bizna Wallet.

Bizna Wallet provides a dedicated wallet for business income, allowing merchants to separate their earnings from household spending without opening another account. This is a turning point for entrepreneurs like market traders and neighbourhood shop owners, who often struggle to manage their finances and maintain accurate records. As Acting Airtel Money Kenya managing director Michael Bonke noted, "Our entrepreneurs need more than just a platform to send and receive money. They need a financial solution that will help them manage their day-to-day business activities."

Airtel has taken a bold pricing decision by offering customers free transfers into a Bizna Wallet. This move could encourage broader adoption among small businesses, who may have been hesitant to adopt a new digital wallet due to the costs associated with transferring money. By eliminating these fees, Airtel is making it easier for businesses to manage their finances and focus on what matters most, growing their operations.

The launch of Bizna Wallet marks a new phase in the battle for merchant payments in Kenya's mobile money market. Safaricom's dominance in this sector is being challenged by Airtel, which is now competing for the attention of Kenya's small businesses. As the market continues to grow, it will be interesting to see how these two players fare in the coming months.## A New Era in Kenya's Informal Economy

As I reflected on the significance of Airtel's move, I couldn't help but think about the impact it could have on Kenya's informal economy. By providing a digital wallet specifically designed for businesses, Airtel is empowering entrepreneurs to take control of their finances and grow their operations. This is a move that could have far-reaching consequences, not just for Airtel, but for the entire country. As the mobile money market continues to evolve, one thing is clear, the future of Kenya's informal economy is looking bright, and Airtel is leading the charge.