Mobile money reshapes economy

DAR ES SALAAM: MOBILE money is becoming an increasingly important part of Tanzania’s economic plumbing, with mobile-payment transactions jumping 28.3 per cent to 255.1tri/- in 2025 as digital payments spread.

The value of mobile payments has increased at a compound annual rate of about 22 per cent since 2021, while transaction volumes rose 24.1 per cent to 7.96bn/- in 2025, according to the Bank of Tanzania’s National Payment Systems Annual Report 2025.

The surge is turning mobile money from a convenient way to transfer cash into a core payments channel linking consumers, businesses, banks and government. The growth reflects both wider access and more frequent use.

Active mobile-money subscriptions rose 17.5 per cent to 63.21m/- in 2024, while the agent network expanded 19 per cent to 1.48m/-, extending digital financial services into rural and underserved markets. But the bigger shift is happening in how mobile money is used.

Person-to-business payments reached 1.74 billion transactions worth 26.6tri/- in 2024, with their value rising 45.8 per cent in a year.

By 2025, payments to businesses had climbed to 2.30 billion transactions worth 37.52tri/-, increases of 30.4 per cent in volume and 41 per cent in value.

The number of merchants accepting digital payments more than doubled to 2.79 million from 1.33 million a year earlier.

That points to a structural change in commerce. Mobile money is moving beyond person-to-person transfers into payments for goods and services, government transactions, bank-to-wallet transfers and international remittances.

Interoperable platforms such as the Tanzania Instant Payment System and Tanzania Quick Response Code are helping connect those transactions across providers and businesses.

The numbers also suggest that increased frequency of use is becoming as important as user growth. Mobile-payment value rose 28.5 per cent in 2024, well ahead of the 17.5 per cent increase in active subscriptions.

With the average transaction at about 31,000/-, little changed from the previous year, the increase in value appears to have been driven largely by more transactions rather than substantially larger transfers.

Cash, however, remains dominant. That makes the significance of mobile money less about replacing cash than about changing where and how transactions take place.

As more merchants, households and institutions adopt digital payments, mobile money is becoming embedded in the infrastructure of everyday commerce. The expansion is also creating a wider payments ecosystem.

Mobile network operators and payment providers benefit from rising transaction flows, while agents provide the physical distribution network that keeps digital money circulating.

Merchants gain electronic records and faster settlement. Banks and fintechs gain access to increasingly visible payment flows that can support new financial products.

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For government, the expanding digital trail could improve collections, administration and the delivery of some services.

The 255tri/- flowing through mobile payments in 2025 should not, however, be confused with 255tri/-of economic output.

Transaction value measures money moving through the system, not value added to the economy.

The potential economic payoff lies in lower transaction costs, faster settlement, better recordkeeping, wider participation in formal finance and less friction in everyday commerce. The scale could grow rapidly if the current pace is sustained.

At annual growth of about 20 per cent, mobile payment value would rise from roughly 255tri/- in 2025 to about 440tri/- within three years and more than 630tri/- within five years.

That is a compound growth scenario, not a forecast, but it illustrates how quickly the payments market could expand.

Such growth would create a larger addressable market for banks, telecom operators, fin techs and merchants while raising the stakes for payment-system reliability, cybersecurity, consumer protection and regulation.

Tanzania is therefore moving beyond a mobilemoney economy defined by how many people have wallets or subscriptions.

It is developing a multi-channel payments economy in which mobile money increasingly determines how consumers, businesses and institutions move money.

The real significance of the 255tri/- is not the amount itself. It is what the growing flow reveals about how Tanzania’s economy is changing.