The mobile money pioneer is entering its next growth phase—and the playbook is changing.
Tanzania’s fintech sector has reached an inflection point. What began as a mobile money revolution focused primarily on financial inclusion has transformed into a sophisticated digital financial infrastructure supporting consumers, small and medium enterprises, and institutional players across the economy.
The shift is visible in the numbers, the business models, and the strategic moves of both established players and new entrants. Understanding this transition is critical for anyone operating in or investing in East Africa’s digital economy.
Interoperability: From Competitive Edge to Table Stakes
A few years ago, wallet-to-wallet and wallet-to-bank interoperability was a competitive differentiator. Today, it’s a baseline expectation.
According to the Bank of Tanzania’s Third Annual Payment Systems Report 2024, mobile money transactions reached TZS 198.9 trillion (approximately $77.5 billion USD) in 2024, representing a 28.54% increase from the previous year. The number of active mobile money subscriptions has surpassed 63.2 million, in a country with a population of roughly 65 million—indicating penetration rates that exceed many developed markets.
The maturity of Tanzania’s payment infrastructure is further demonstrated by the Tanzania Instant Payment System (TIPS). TIPS processed TSh 29.9 trillion ($11.6 billion USD) in 2024, up from TSh 12.5 trillion in 2023—nearly doubling in a single year. The system handled 454 million transactions across 46 participating institutions, enabling seamless real-time transfers between banks, mobile money wallets, and other financial service providers.
Interoperability has fundamentally reduced transaction friction, improved liquidity flows across the financial system, and enabled increasingly complex use cases spanning payments, credit, and merchant services. What was once a fragmented ecosystem of walled gardens has become an interconnected network where value moves more freely.
This infrastructural maturity creates the foundation for the next wave of innovation—but it also means fintechs can no longer compete on connectivity alone.
Price Sensitivity and the Economics of Scale
As adoption has grown and competition intensified, users have become notably more price-conscious. Transaction fees that were once accepted as the cost of digital access are now scrutinized and compared.
The mobile money market has become increasingly competitive, with M-Pesa holding 38.9% market share, Airtel Money at 30.7%, Mixx by Yas at 19%, HaloPesa at 9%, and T-Pesa at 2.4% as of December 2024. This fragmentation means no single player can dictate pricing, and regulatory interventions, including the Bank of Tanzania’s push for lower fees on smaller transactions, reflect both consumer demand and policy priorities around financial inclusion.
In response, fintech operators are experimenting with new pricing models: bundled service packages that spread costs across multiple products, tiered fee structures that reward higher-volume users, and subscription-like models that provide predictable costs in exchange for transaction volumes.
The challenge is maintaining unit economics while remaining affordable to price-sensitive segments. Companies that solve this equation—through operational efficiency, cross-subsidization, or value-added services—will be positioned for sustainable growth.
From Point Solutions to Platform Economics
The era of single-purpose fintech products is ending.
Early mobile money services primarily facilitated peer-to-peer transfers and airtime purchases. Today’s competitive products combine payments, savings accounts, merchant payment tools, card services, and increasingly, credit products—all within integrated platforms.
The growth in complementary services is evident: virtual card registrations reached 820,832 in 2024, representing 60.37% growth, while merchants accepting digital payments surged to 1.3 million, more than doubling from the previous year.
Selcom, a major payment processor and switch operator in Tanzania, launched Selcom Pesa, a consumer-facing app that illustrates how infrastructure providers are moving upstream into end-user products. Selcom Pesa combines mobile payments, savings accounts, merchant tools, Mastercard integration, cross-border transfers, and digital loans up to TZS 1,000,000—demonstrating the multi-service platform approach. Similarly, Mixx by Yas has captured significant market share by building a comprehensive platform from inception rather than adding features incrementally.
This reflects a fundamental shift in business strategy: from customer acquisition focused on single transactions to building higher lifetime value through ecosystem engagement. The goal is platform lock-in—not through artificial barriers, but through genuine utility across multiple financial needs.
According to GSMA research across multiple African markets, users who engage with three or more services within a fintech platform demonstrate 60-70% higher retention rates compared to single-service users. Multi-product platforms also generate significantly higher revenue per user—a critical metric as customer acquisition costs rise.
Blurred Lines: Infrastructure Players Becoming Consumer Brands
One of the most interesting dynamics in Tanzania’s fintech ecosystem is the strategic repositioning of traditionally B2B infrastructure companies.
Payment processors, switches, and acquiring banks that once operated exclusively behind the scenes are now launching consumer-facing products. The Selcom Pesa launch exemplifies this trend—a payment infrastructure provider leveraging its backend capabilities, regulatory licenses, and merchant network to compete directly in the consumer space.
Meanwhile, consumer wallets are building out merchant acquiring capabilities and agent networks—moving into what was traditionally banking and infrastructure territory. Mixx by Yas’s rapid growth to 19% market share demonstrates how new entrants can scale by combining consumer and merchant-facing services.
This convergence is reshaping competitive dynamics. Infrastructure providers bring technical capability, regulatory relationships, and existing network effects. Consumer-facing brands bring user engagement data, brand equity, and distribution channels.
The result is a more complex competitive landscape where former partners may become competitors, and where value chain integration becomes a strategic imperative.
Distribution Innovation: Reaching the Last Mile Without Bleeding Capital
Traditional banking infrastructure—physical branches, ATM networks, card-issuing infrastructure—requires significant capital investment. This model struggles in semi-urban and rural markets where transaction densities don’t justify fixed costs.
Tanzania’s fintech sector has responded with lightweight distribution models: smartphone-based payment acceptance that turns any device into a point-of-sale terminal, software-based “soft POS” solutions that eliminate hardware costs entirely, and agency banking networks that leverage existing retail infrastructure rather than building from scratch.
Tanzania’s financial ecosystem now includes over 52,000 financial access points comprising mobile money agents, bank branches, ATMs, and other touchpoints. This distributed model has proven far more capital-efficient than traditional branch expansion while achieving broader geographic coverage.
The 1.3 million merchants now accepting digital payments—more than double the previous year—represent a massive expansion of the digital payment acceptance infrastructure, largely achieved through low-cost digital solutions rather than traditional POS hardware.
For rural and semi-urban markets—where Tanzania’s agricultural economy still employs the majority of the population—these alternative distribution models are often the only viable path to financial service access.
What This Means: Beyond Access to Sustainable Scale
Tanzania’s fintech evolution represents a maturation from access-focused innovation to efficiency-driven scaling.
The foundational work of financial inclusion—getting people into the formal financial system—has largely succeeded. 76% of Tanzanian adults now have access to formal financial services, up from 65% in 2017, according to the FinScope Tanzania 2023 survey. Mobile money usage has reached 72% of adults, up from 60% in 2017.
The next phase is about what you do with that access: building sustainable business models that can operate at scale, creating products that genuinely improve financial outcomes rather than simply digitizing existing behaviors, and developing infrastructure that supports economic activity beyond simple transfers.
This shift has implications for founders, investors, and policymakers. The low-hanging fruit of customer acquisition through basic mobile money has been picked. Competitive advantage now comes from operational excellence, product sophistication, and ecosystem integration.
For the broader East African fintech ecosystem, Tanzania’s trajectory offers a preview. As markets mature, the winners won’t be those who simply digitize financial services—they’ll be those who build genuinely better financial infrastructure that creates value at scale.
The mobile money revolution opened the door. What happens next will determine whether digital finance becomes a transformative economic force or simply a more convenient way to do the same things.
Early indicators suggest Tanzania is choosing transformation. With transaction volumes growing 26.73% and values increasing 28.54% year-over-year, alongside the emergence of sophisticated multi-service platforms and real-time payment infrastructure, the ecosystem is demonstrating both scale and sophistication.
The question now is not whether digital finance will continue to grow, but which business models and which players will capture the value being created.
Reference Note:
Data in this article is compiled from the most recent authoritative sources including the Bank of Tanzania’s Third Annual Payment Systems Report 2024 (published March 2025) for mobile money transaction volumes, values, and infrastructure data; FinScope Tanzania 2023 Report by FSDT for financial inclusion metrics; GSMA State of the Industry Report 2025 for global mobile money context and regional comparisons; and TCRA Q4 2024 Communication Statistics for mobile subscriptions and market share data.
