M-Pesa Ethiopia, operated by Safaricom Telecommunications Ethiopia, has signed an agency agreement with the state-owned postal service, EthioPost, to expand its distribution network across the country. The partnership, announced this week, will allow Ethiopians to access M-Pesa services, including cash-in and cash-out transactions, at EthioPost's extensive network of branches.
The agreement marks a significant step for the M-Pesa brand as it seeks to establish a foothold in Africa's second-most populous nation. Safaricom Telecommunications Ethiopia, a consortium led by Kenya's Safaricom, launched its mobile network and the M-Pesa mobile money service in Ethiopia in 2023 after securing one of two new telecom licenses. The partnership with EthioPost directly addresses a key challenge for any mobile money provider: building a dense, accessible, and trusted agent network for physical transactions.
EthioPost operates hundreds of offices across Ethiopia, providing a ready-made physical infrastructure in both urban and rural areas. This reach is critical for driving financial inclusion in a country where a large portion of the population remains unbanked. By leveraging the postal service's established presence, M-Pesa Ethiopia can accelerate its network rollout more efficiently than building an agent network entirely from scratch.
The move comes as the Ethiopian government continues to liberalize its telecoms sector, which was a state monopoly for decades. The entry of Safaricom and its M-Pesa service is seen as a major test case for competition and innovation in the country's digital finance landscape. However, the venture faces competition from the incumbent Ethio Telecom, which operates its own mobile money service, Telebirr, and from other potential entrants.
Separately, in Tanzania, the M-Pesa service operated by Vodacom has launched a contactless tap-to-pay feature, allowing users to make payments at point-of-sale terminals using their smartphones. This feature, described as a first for a mobile money service in Africa, is designed to bridge the gap between mobile money wallets and the global card-based payment ecosystem. It enables transactions without requiring an internet connection on the user's device.
The development in Ethiopia underscores the strategic importance of physical distribution partnerships for mobile money, even as services evolve to include more digital payment methods like tap-to-pay. For M-Pesa Ethiopia, the EthioPost deal is a foundational step to build the essential cash-in, cash-out infrastructure needed to onboard millions of new users.