The verdict in three sentences
In Tanzania, M-Pesa leads with an estimated ~55% market share and a merchant fee around 1-2%, making it the backbone of any collection strategy. Airtel Money (1-1.8%) is gaining ground and is essential for reaching customers who prefer it, especially since interoperability became mandatory in 2022. The golden rule: accept both, particularly if you serve rural areas where coverage varies sharply between operators.
The Tanzanian market in numbers
Here are the 2026 orders of magnitude (estimates based on public pricing and merchant practice).
| Criterion | M-Pesa TZ | Airtel Money TZ |
|---|---|---|
| Merchant fee | 1 a 2% | 1 a 1.8% |
| Estimated market share | ~55% | ~25% |
| USSD / API access | USSD + API | USSD + API |
| Transaction cap | high (KYC tiers) | medium a high |
| Rural coverage | strong | strong by region |
| Interoperability | mandatory since 2022 | mandatory since 2022 |
Since interoperability is mandatory, transfers can cross networks, but merchant acceptance is still per-operator. Refusing one operator mechanically loses a meaningful share of potential customers depending on location.
USSD, API and caps: what changes in practice
The technical channel shapes the customer experience and the payment success rate.
| Element | M-Pesa | Airtel Money |
|---|---|---|
| USSD payment | yes, short code | yes, short code |
| Merchant API | available | available |
| Fixed fee per transaction | small tier | small tier |
| Indicative success rate | 90 a 95% | 88 a 94% |
| Settlement delay | T+1 a T+2 | T+1 a T+3 |
A well-designed USSD flow and a reliable webhook push the success rate up by several points. Often the quality of the integration, more than the operator, decides how many payments actually complete.
Mini case study
Juma, who runs a restaurant in Dar es Salaam, collects TZS 5,000,000 per month. His customers split 55% M-Pesa, 45% Airtel Money.
- M-Pesa: TZS 2,750,000 at 1.5% = TZS 41,250 in fees
- Airtel: TZS 2,250,000 at 1.6% = TZS 36,000 in fees
- Total monthly fees: TZS 77,250 (about 1.55% of revenue)
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If he accepted only M-Pesa, he would save the Airtel fees but risk losing up to TZS 2,250,000 in sales he could not collect. Accepting both is clearly profitable.
FAQ
Should I accept both M-Pesa and Airtel Money in Tanzania?
Yes, in most cases. With M-Pesa around 55% and Airtel around 25%, refusing one operator means turning away a significant share of customers, especially outside major cities.
Which operator has the lower merchant fee?
Airtel Money often sits slightly lower at 1-1.8% versus M-Pesa's 1-2%. The gap is modest compared with the customer volume each operator brings.
Is USSD payment reliable?
Yes, USSD is heavily used in Tanzania and works without a smartphone. A well-built USSD flow reaches a 90-95% success rate with careful integration.
How fast do I receive funds?
Expect T+1 to T+2 with M-Pesa and T+1 to T+3 with Airtel Money. Check this delay if your cash flow is tight.
Does mandatory interoperability mean I only need one operator?
No. Interoperability lets customers transfer across networks, but merchant acceptance is still per-operator, so accepting both maximises your reach.
Let's talk about your project. We integrate M-Pesa and Airtel Money with optimised USSD flows and reliable webhooks. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.