Building African Tech Infrastructure: M-Pesa to Flutterwave

Building African Tech Infrastructure: M-Pesa to Flutterwave

In 2007, only 26% of Kenyans had a bank account.

Bank branches were rare outside cities. For millions of people, receiving money meant a day-long bus trip to collect cash—with all the risks that entailed.

Then a telecommunications company tried something radical: let people send money using their mobile phones.

M-Pesa launched on March 6, 2007.

Eighteen years later, it has over 70 million customers across Africa, processes $309 billion annually, and has lifted 194,000 Kenyan families out of poverty.

M-Pesa wasn't just a product. It was proof that Africans could build world-class infrastructure for themselves.

Today, that spirit has spawned Flutterwave, Paystack, OPay, and hundreds of other fintech companies that are building Africa's digital economy—without waiting for permission from Silicon Valley.

This is the story of African tech infrastructure built by Africans, for Africans.

M-Pesa: The Revolution That Started It All

The Problem

Before mobile money, financial services in Africa were designed for the wealthy and urban:

• Bank branches clustered in cities

• Minimum balance requirements excluded the poor

• Remittances required expensive money transfer services

• Cash was king—but cash gets stolen

In 2007, Kenya had:

• 26% of adults with bank accounts

• Millions of rural residents with no financial services access

• Urban workers sending money home through informal (and risky) channels

The Solution

Nick Hughes at Vodafone proposed using mobile phones to deliver financial services. Partner Safaricom Kenya agreed to try.

How M-Pesa works:

1. Register with any M-Pesa agent using your ID and Safaricom SIM

2. Deposit cash with an agent; they credit your mobile wallet

3. Send money to any phone number with a few button presses

4. Recipient withdraws cash at any agent, anywhere in Kenya

5. No bank account needed—ever

The genius was simplicity. M-Pesa worked on basic feature phones via SMS and USSD codes. You didn't need a smartphone, internet connection, or banking relationship.

The Growth

M-Pesa spread faster than anyone expected:

Today's scale:

• 34 million customers in Kenya alone

• 381,000 agents nationwide

• 82 million mobile money accounts in Kenya (population: 56 million)

• 28 billion transactions processed in FY 2023/24

• 3,000 transactions per second at peak times

M-Pesa transactions now equal roughly 40 trillion Kenyan shillings ($309 billion) annually—equivalent to handling most of Kenya's GDP.

Impact on Poverty

A landmark study by MIT and Georgetown University found that M-Pesa lifted approximately 194,000 Kenyan households—2% of the country—out of extreme poverty since 2008.

How?

Access to emergency funds: When illness or crisis strikes, families can receive money from relatives within minutes instead of days.

Savings accumulation: Even small amounts saved digitally are safer than cash hidden at home.

Business capital: Small entrepreneurs can receive payments and access microloans.

Remittances: Urban workers can support rural families easily, increasing financial flows to villages.

Financial inclusion statistics:

• 2007: 26% of Kenyans had financial services access

• 2023: 84% have financial services access

M-Pesa didn't just transfer money. It transferred financial citizenship to millions who'd been excluded.

Beyond Payments: M-Pesa's Ecosystem

From Transfers to Full Financial Services

M-Pesa evolved from simple transfers to a complete financial ecosystem:

Savings:

• M-Shwari partnership with Commercial Bank of Africa

• Millions of Kenyans now save digitally for the first time

Credit:

• KCB M-Pesa loans disbursed billions

• Fuliza overdraft facility for emergencies

• Credit scoring based on transaction history

Insurance:

• Safaricom acquired an insurance intermediary license

• Micro-insurance products accessible via mobile

Investment:

• M-PESA Global fund enables international transfers

• Wealth management products in development

Business services:

• 1.5 million+ enterprises accept M-Pesa payments

• Lipa Na M-Pesa for merchant payments

• Pochi La Biashara for microenterprises

• Business loans and overdraft facilities

Super Apps:

• Consumer Super App: 7.4 million downloads, 1.2 million active users

• Business Super App: 500,000+ downloads, 251,600 active merchants

• 61 mini-apps for various services

The Agent Network

M-Pesa's secret weapon isn't technology—it's people.

381,000 agents across Kenya serve as the human interface between digital money and cash. They're everywhere: in shopping centers, at petrol stations, in tiny villages accessible only by dirt roads.

This network ensures that no matter how remote your location, you can deposit or withdraw cash within walking distance.

Agents earn commissions on transactions, creating employment for hundreds of thousands. The average M-Pesa transaction fee is just 0.62% of transaction value—far cheaper than bank fees or traditional money transfer services.

Technical Innovation

M-Pesa continues to evolve:

M-Pesa Ratiba (2024): Automated standing orders for recurring payments—bills, subscriptions, regular transfers

Fintech 2.0 Platform: New infrastructure targeting 8,000 transactions per second capacity

Tap to Pay: Contactless NFC payments via smartphone (rolling out)

AI Integration: Fraud detection and personalized services

International expansion: M-Pesa Global connects Kenya to Ethiopia and other markets

The Fintech Explosion

Nigeria: Africa's Startup Capital

If M-Pesa proved mobile money could work, Nigeria's fintech ecosystem proved African startups could compete globally.

Flutterwave:

• Founded: 2016 by Olugbenga Agboola

• Raised: $470+ million

• Valuation: $3 billion (2022)

• Processes: 500,000+ payments daily

• Coverage: 35+ countries

• Total transactions: 1 billion+, valued at $40 billion+

Paystack:

• Founded: 2015 by Shola Akinlade

• Acquired: By Stripe for $200 million (2020)—largest startup acquisition in African history at the time

• Now operates across multiple African markets

OPay:

• Founded: 2018

• Users: 35 million+

• Backed by Opera (Norwegian company)

• Dominates Nigerian mobile payments

Moniepoint:

• Provides payment infrastructure for small businesses

• Major player in merchant services

Chipper Cash:

• Cross-border remittances

• P2P payments across African countries

What These Companies Built

African fintechs didn't just copy Western models—they built infrastructure suited to African realities:

Multi-rail payments:

Africa's payment landscape is fragmented: different banks, mobile money operators, card networks, and local payment methods. Flutterwave and Paystack built unified APIs that let merchants accept any payment method through a single integration.

One API call. Cards, bank transfers, mobile money, USSD—all handled.

Cross-border capability:

Moving money across African borders was historically expensive and slow, often routed through New York or London. African fintechs built direct corridors:

• Flutterwave enables payments in 30+ currencies

• Chipper Cash moves money between African countries instantly

• PAPSS (Pan-African Payment and Settlement System) settles in local currencies

USSD fallback:

Not everyone has a smartphone or reliable internet. Nigerian fintechs built USSD channels so users with basic phones can still transact.

Agent networks:

Following M-Pesa's model, Nigerian fintechs recruited agents in markets, shops, and neighborhoods to serve the unbanked.

2024-2025: Record Growth

Africa's fintech market grew at 38.38% CAGR from 2021-2025.

Key 2024 statistics:

• Kenya fintech funding: $638 million

• Nigeria instant payments: $1 trillion+ processed

• Over 500 million active mobile money accounts continent-wide

• Transaction value exceeding $830 billion annually

• Fintech captured 40%+ of all African startup funding

Flutterwave's 2024 highlights:

• Record December: 26 million transactions worth $500 million

• 50% of businesses received payments from new geographic locations

• Expanded to Rwanda, Ghana, Uganda, Zambia, Mozambique

• Acquired Mono (open banking) in January 2026

The Infrastructure Layer

APIs: Africa's Digital Rails

Just as colonial-era railways enabled resource extraction, APIs (Application Programming Interfaces) are building Africa's digital economy.

What APIs do:

They turn complex payment processes into simple code. A developer can integrate payments with a few lines:

```

// Simplified example

flutterwave.charge({

amount: 5000,

currency: "NGN",

payment_options: "card,banktransfer,mpesa"

})

```

That single call handles:

• Card payments

• Bank transfers

• Mobile money

• Currency conversion

• Fraud detection

• Compliance checks

Key platforms:

Safaricom Daraja (2017):

• Opened M-Pesa to third-party developers

• Businesses can automate payments, verify transactions, reconcile accounts

• Spawned thousands of apps built on M-Pesa rails

Flutterwave API:

• Unified gateway for merchants across Africa

• Supports cards, bank transfers, mobile money, USSD

• Handles complexity of fragmented banking systems

Paystack:

• Simple checkout integration

• Developer-friendly documentation

• Now part of Stripe's global infrastructure

Mono (now Flutterwave):

• Open banking API

• Connects to 500+ banks and fintechs

• 5 million linked accounts

Open Banking Arrives

Open banking lets customers securely share their financial data with third-party services. It's transforming how financial products work:

Bank verification: Instantly verify someone's bank account

Income verification: Confirm employment and earnings for loan applications

Account-to-account payments: Move money directly between banks without cards

Financial aggregation: See all accounts in one dashboard

Flutterwave's January 2026 acquisition of Mono signals open banking's arrival as core infrastructure, not just a feature.

The Payment Switch

National payment switches enable real-time transfers across banks and operators:

Nigeria NIBSS Instant Payments: Processed $1 trillion+ in 2024

Kenya PesaLink: Real-time interbank transfers

Ghana GhIPSS: Powers Ghana's instant payment ecosystem

These switches mean money moves as fast as messages—seconds, not days.

Continental Integration: PAPSS

The Problem of Fragmentation

Before PAPSS, cross-border African payments were absurd:

A payment from Nigeria to Kenya might route:

1. Nigerian bank → US correspondent bank → Kenyan bank

2. Converting naira → dollars → shillings

3. Taking 3-5 days

4. Costing 5-10% in fees

African countries traded more easily with Europe than with each other.

The Solution

The Pan-African Payment and Settlement System (PAPSS), launched in 2022 under the AfCFTA framework, enables:

• Instant settlement between African countries

• Local currency transactions (no dollar conversion)

• Lower costs than traditional correspondent banking

• African data staying on African infrastructure

How it works:

1. Nigerian exporter invoices Kenyan buyer in naira

2. PAPSS settles the transaction instantly

3. No US bank involvement

4. Fees: fraction of traditional cross-border costs

PAPSS is critical for the African Continental Free Trade Area to function. You can't have a $3.4 trillion integrated market if moving money between countries is expensive and slow.

Challenges Remaining

Infrastructure Gaps

Power:

• Nigeria's data centers need 137 MW

• The grid provides ~4 hours of reliable power daily

• Diesel generators fill the gap—expensive and polluting

Connectivity:

• Rural internet access remains limited

• Undersea cable failures can cripple entire regions (March 2024 blackout)

• Last-mile connectivity is expensive

Smartphones:

• 4G penetration growing but far from universal

• Many users still rely on basic phones

• Fintech must maintain USSD channels alongside apps

Regulatory Uncertainty

Different countries, different rules:

• Some embrace innovation (Kenya, Rwanda)

• Others move slowly (various markets)

• Cross-border regulations remain complex

Fintechs navigate 54 different regulatory environments.

Competition and Consolidation

The fintech boom attracted competition:

• Global players (Stripe via Paystack, PayPal entering remittances)

• Well-funded local champions

• Traditional banks finally digitizing

Some predict consolidation. Others expect more fragmentation.

Cybersecurity

Digital finance creates digital crime opportunities:

• Fraud attempts increasing

• SIM swap attacks

• Phishing targeting mobile money users

• Need for constant security investment

What's Next

Super Apps Rising

Following Asian models (WeChat, Grab), African companies are building super apps:

• M-Pesa Super App: Payments + mini-apps + financial services

• OPay: Payments + ride-hailing + food delivery

• Chipper Cash: P2P + crypto + stock trading

The goal: become the platform for daily digital life.

Crypto and Stablecoins

Africa has some of the highest crypto adoption rates globally, driven by:

• Currency instability in some countries

• Cross-border payment needs

• Young, tech-savvy population

Fintechs are integrating crypto and stablecoins into traditional payment flows.

Embedded Finance

Financial services disappearing into other apps:

• Buy Now Pay Later in e-commerce

• Insurance bundled with purchases

• Savings built into payroll platforms

Every app becomes a fintech app.

AI-Powered Services

• Fraud detection at scale

• Credit scoring for the unbanked (using transaction data)

• Personalized financial products

• Automated customer service in local languages

Regional Expansion

Nigerian fintechs pushing into Francophone Africa. East African companies moving west. South African players going north.

The goal: pan-African platforms that serve the continent, not just single markets.

Why This Matters

Proof of Concept

M-Pesa proved Africans could build world-class infrastructure. Flutterwave proved African startups could raise billions and compete globally. PAPSS proved African institutions could coordinate continentally.

Every success makes the next one more likely.

Economic Transformation

Financial inclusion isn't charity—it's economic development:

• Small businesses can accept digital payments

• Entrepreneurs can access capital

• Workers can save and invest

• Governments can deliver benefits efficiently

McKinsey estimates fintech could add $150 billion to Africa's GDP by 2027.

Sovereignty

African-built financial infrastructure means:

• African data stays in Africa

• African regulators have oversight

• African companies capture the value

• African users shape the products

When Flutterwave processes a payment, that's value created by Africans, for Africans, staying in Africa—unlike when data flows to Silicon Valley.

A Model for Other Sectors

The fintech playbook—identify gaps, build solutions, scale continentally—can apply to:

• Healthcare technology

• Agricultural platforms

• Educational tools

• Logistics networks

• Energy systems

What fintechs did for money, other African companies can do for everything else.

The Bigger Picture

Fifty years ago, Africans had to use colonial-built railways to export their resources for others' benefit.

Twenty years ago, Africans had to use colonial-language banks that excluded most of the population.

Today, 70+ million Africans send money with a text message. Businesses in Lagos accept payments from London in seconds. A farmer in rural Kenya can save money without ever seeing a bank branch.

This didn't happen because the World Bank funded it or Silicon Valley built it.

It happened because African entrepreneurs saw a problem and solved it.

M-Pesa didn't ask permission. Flutterwave didn't wait for infrastructure to improve. Paystack didn't accept that Africa was "too hard" for tech.

They built.

And in building, they proved something the colonial mentality never acknowledged: Africa doesn't need to import its future. Africa can build its future.

One payment at a time.

Key Statistics

Timeline: African Fintech

FAQ: African Tech Infrastructure

1. What is M-Pesa?

A mobile money service launched in Kenya in 2007 that allows users to send, receive, save, and borrow money using their mobile phones without a bank account. Now has 70+ million customers across Africa.

2. How big is M-Pesa?

In Kenya alone, M-Pesa has 34 million customers, processes 28 billion transactions annually worth $309 billion, and handles 3,000 transactions per second.

3. What is Flutterwave?

A Nigerian fintech company founded in 2016 that provides payment infrastructure for businesses across Africa and internationally. Valued at $3 billion, it has processed over $40 billion in transactions.

4. What happened to Paystack?

Stripe acquired Paystack for $200 million in 2020—at the time, the largest African startup acquisition. Paystack continues operating as part of Stripe's global network.

5. How many mobile money accounts are there in Africa?

Over 500 million active mobile money accounts, processing more than $830 billion in transactions annually.

6. What is PAPSS?

The Pan-African Payment and Settlement System, launched in 2022, enables instant cross-border payments between African countries in local currencies without routing through US or European banks.

7. Did M-Pesa reduce poverty?

Yes. An MIT/Georgetown study found M-Pesa lifted approximately 194,000 Kenyan households (2% of the country) out of extreme poverty since 2008.

8. What's Kenya's financial inclusion rate now?

84% as of 2023, up from 26% in 2007 when M-Pesa launched.

9. What is open banking?

Technology that lets customers securely share financial data with third-party services. Flutterwave acquired Mono, an open banking company, in January 2026.

10. How much funding does African fintech attract?

Fintech captured over 40% of all African startup funding in 2024, with Kenya alone receiving $638 million in fintech investment.

Sources

• Safaricom official reports

• GSMA Mobile Economy Africa

• Flutterwave corporate communications

• Statista

• McKinsey Africa reports

• MIT/Georgetown M-Pesa poverty study

• Central Bank of Kenya

• TechCabal

• Finance in Africa

• Various fintech industry analyses