Safaricom Leverages Pesapal’s 30,000 POS Terminals to Expand M‑PESA Contactless

Safaricom’s latest partnership with Tanzanian payments platform Pesapal marks a decisive step forward for M-PESA contactless adoption across East Africa. By integrating its mobile‑money service into Pesapal’s existing network of 30,000 point‑of‑sale (POS) terminals, Safaricom can instantly extend contactless capabilities to thousands of merchants without the need to build a dedicated hardware infrastructure. The move, announced on 1 October 2026, reflects a broader trend among African fintechs to leverage shared ecosystems for faster scale‑up, and it carries implications for retailers, consumers, and regulators throughout the continent.

Why the partnership matters for African fintechs

For years, mobile‑money operators have relied on proprietary hardware or limited agent networks to reach customers. Safaricom’s M‑PESA, launched in 2007, grew into Kenya’s most trusted payment method, but its contactless rollout has been slower than expected due to the high cost of deploying dedicated terminals. Pesapal, on the other hand, already operates a robust POS footprint serving merchants in Tanzania, Kenya, Uganda and Rwanda. By piggy‑backing on this infrastructure, Safaricom sidesteps capital‑intensive rollout phases and accelerates market penetration.

Industry observers note that this collaboration exemplifies a shift from “build‑own‑operate” models toward “integrate‑share‑grow” strategies. In a continent where digital inclusion remains uneven, such alliances can close the gap between urban fintech hubs and rural commerce corridors. The partnership also aligns with the African Development Bank’s 2026‑2030 agenda to increase digital payment coverage to 80 % of the adult population, a target that requires innovative, cost‑effective solutions.

How M‑PESA contactless will work on Pesapal terminals

Technical integration is straightforward: Pesapal’s terminals, which already support Visa, Mastercard, and local card schemes, will receive a software update that enables NFC (near‑field communication) and QR‑code scanning for M‑PESA. Merchants simply select the “M‑PESA Contactless” option on the terminal screen, and customers tap their phones or scan a QR code to complete the transaction. The process mirrors the familiar card‑pay experience, reducing friction for users who have grown accustomed to contactless payments during the post‑COVID era.

Safaricom has confirmed that transaction fees for M‑PESA contactless will remain competitive with existing card rates, a crucial factor for small‑scale traders who operate on thin margins. Moreover, the integration supports real‑time settlement, meaning merchants receive funds in their bank accounts within seconds, a feature that has historically set M‑PESA apart from traditional banking channels.

Impact on merchants and consumers across the region

For merchants, the immediate benefit is access to a payment method that already enjoys deep trust among Kenyan consumers. According to Safaricom’s 2025 annual report, over 40 million Kenyans use M‑PESA for everyday transactions, ranging from utility bills to grocery shopping. By offering M‑PESA contactless at the checkout, retailers can capture a larger share of cash‑averse shoppers who prefer mobile money over cash or cards.

Consumers, too, stand to gain. The contactless option eliminates the need to open the M‑PESA app, enter a PIN, or wait for a USSD prompt. A simple tap or scan completes the payment in under two seconds, making the checkout experience smoother and more hygienic—an ongoing concern in the wake of heightened health awareness. Additionally, the integration opens the door for new value‑added services such as loyalty programmes, instant discounts, and micro‑credit offers that can be triggered directly from the POS terminal.

Regulatory considerations and data security

Both Kenya’s Central Bank and Tanzania’s Bank of Tanzania have been proactive in issuing guidelines for mobile‑money interoperability. The partnership complies with the 2025 East African Payments Union (EAPU) framework, which mandates common standards for data encryption, consumer consent, and cross‑border transaction monitoring. Safaricom and Pesapal have pledged to conduct regular security audits and to adopt tokenisation for all NFC transactions, ensuring that cardholder data never leaves the terminal in plain text.

Data privacy remains a top priority. The two firms will share only the minimal transaction metadata required for settlement, and all user identifiers will be anonymised in line with the African Union’s 2024 Data Protection Convention. This approach mitigates the risk of data breaches while still enabling valuable analytics for merchants, such as sales trends and peak shopping hours.

Potential ripple effects for other African markets

While the initial rollout focuses on Kenya, Tanzania, Uganda and Rwanda, the model is easily replicable across the continent. Countries like Nigeria, Ghana and South Africa already host vibrant mobile‑money ecosystems—Paystack, Flutterwave, and Interswitch, for example—that could benefit from similar POS‑sharing agreements. The success of the Safaricom‑Pesapal collaboration may encourage regional fintechs to pursue joint ventures, reducing duplication of infrastructure and fostering a more unified African digital economy.

In Nigeria, where the Central Bank of Nigeria (CBN) recently introduced the “Open Payments Architecture” to standardise digital transactions, a comparable partnership could accelerate the adoption of contactless mobile money among informal traders in Lagos markets and northern towns alike. Likewise, in South Africa, where card‑based contactless payments dominate, integrating mobile‑money options could broaden financial inclusion for unbanked populations.

Challenges ahead and how they might be addressed

Despite the clear benefits, the partnership faces several hurdles. First, merchant education is essential; many small‑scale traders still rely on cash and may be hesitant to adopt new technology. Safaricom and Pesapal plan a joint outreach programme that includes on‑site training, instructional videos in Swahili and English, and incentive schemes such as reduced transaction fees for the first three months.

Second, network reliability can be a concern in remote areas where internet connectivity is sporadic. To mitigate this, the terminals will support offline‑first processing, storing transaction data locally and syncing with the server once a stable connection is restored. This feature mirrors the offline capabilities already used by M‑PESA agents in rural Kenya.

Finally, competition from other mobile‑money providers—such as MTN Mobile Money and Airtel Money—means that Safaricom must continuously innovate to retain market share. The contactless rollout is a strategic move to stay ahead, but future enhancements like QR‑code‑based loyalty rewards and integration with e‑commerce platforms will be crucial for sustained relevance.

Looking ahead: what 2027 could hold for mobile‑money POS integration

As the partnership matures, Safaricom aims to expand the POS network beyond the initial 30,000 terminals, targeting an additional 20,000 locations by the end of 2027. The company also envisions a “one‑click” checkout experience where customers can pre‑authorise a set spending limit, allowing for even faster transactions at high‑traffic venues such as malls and transport hubs.

Beyond East Africa, the model could inspire pan‑African standards for mobile‑money POS integration, potentially leading to a continent‑wide “M‑PESA contactless” brand that works seamlessly across borders. Such a development would align with the African Continental Free Trade Area (AfCFTA) goals of simplifying cross‑border commerce and could become a cornerstone of Africa’s digital trade infrastructure.

FAQ

• What is M‑PESA contactless? It is a tap‑or‑scan payment method that allows M‑PESA users to pay at POS terminals without opening the app or entering a PIN, using NFC or QR‑code technology.
• Which merchants can use the new Pesapal terminals? Any merchant already equipped with a Pesapal POS terminal—ranging from street vendors to supermarkets—can enable M‑PESA contactless through a simple software update.
• Are there additional fees for using M‑PESA contactless? Safaricom has pledged that fees will remain comparable to existing card‑based rates, with no hidden surcharges for the contactless option.
• How secure is the contactless transaction? Transactions are encrypted, tokenised, and comply with the East African Payments Union security standards, ensuring that sensitive data is never exposed.
• Will this service be available in Nigeria? While the current rollout focuses on Kenya, Tanzania, Uganda and Rwanda, the partnership sets a precedent that could be replicated in Nigeria and other markets in the near future.

Safaricom’s strategic use of Pesapal’s POS network demonstrates how collaboration, rather than competition, can drive rapid fintech adoption across Africa. By making M‑PESA contactless widely accessible, the partnership not only simplifies everyday transactions but also paves the way for a more inclusive, interoperable digital economy.

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