M-Pesa's Lipa na M-Pesa service is transforming digital commerce 

By John Doe

Kenya's position as East Africa's most dynamic digital economy is well documented, but the mechanism driving it deserves more attention than it typically receives.

The story is not just that Kenyan entrepreneurs are building innovative products. It is that a layer of shared digital infrastructure — payment rails, identity verification systems, data APIs, and logistics networks — has been built that allows new businesses to launch competitive products without rebuilding that infrastructure themselves.

The M-Pesa infrastructure effect

The foundational example remains M-Pesa. Since its launch in 2007, Safaricom has progressively opened its payment infrastructure to third-party developers through a documented API layer.

As The Star has previously reported in its coverage of how M-Pesa's Lipa na M-Pesa service is transforming digital commerce, the service has become the default payment layer for an enormous range of digital businesses — from e-commerce and delivery apps to school fee collection platforms.

The commercial logic is simple: when Safaricom built M-Pesa, it invested in infrastructure that would have been individually impossible for the thousands of businesses that now depend on it. By making it accessible via API, it enabled an ecosystem of innovation that could not have existed otherwise.

The pattern extending beyond payments

The infrastructure-sharing model has moved beyond payments into logistics, identity verification, and data services.

Sendy, the Kenyan logistics platform, provides a freight API that lets e-commerce businesses access last-mile delivery capacity without managing their own vehicle fleets.

Smile Identity provides biometric identity verification as an API service, solving the KYC problem for financial services, telehealth, and gig economy platforms simultaneously. 

According to the Kenya ICT Authority, Kenya's digital economy contributed an estimated 8.6 per cent of GDP in 2023, a proportion that reflects the breadth of sectors now built on top of shared digital infrastructure rather than proprietary systems.

Digital entertainment adopting the same logic

Kenya's digital entertainment sector — one of the most active in Africa, driven by high mobile penetration and a young demographic with spending power — is now following the same infrastructure-sharing pattern.

For operators offering casino-style gaming products, a game aggregation solution provides access to content from multiple game studios through a single integration, just as M-Pesa provides payment access to multiple financial use cases through a single API.

The operator benefits from a catalogue of hundreds of titles without the engineering cost of building each studio integration independently.

The Betting Control and Licensing Board oversees a market of more than 80 licensed operators — a competitive environment where the operators with the broadest content access and the fastest product development cycles hold the advantage.

The governance challenge

Shared infrastructure creates efficiencies but also concentrates risk. When a significant portion of Kenya's digital economy runs on Safaricom's network, or when multiple digital businesses in a regulated sector depend on the same underlying B2B platform, a service disruption at the infrastructure level creates cascading effects. 

The Communications Authority of Kenya and sector-specific regulators have begun incorporating infrastructure concentration into their oversight frameworks. The evolution of Kenya's platform economy over the next decade will depend in part on how this governance challenge is managed — whether the country builds a resilient, redundant infrastructure layer or a fragile one built around a small number of dominant providers.

The scale of what has already been built is nonetheless remarkable. The question for Kenyan digital entrepreneurs today is not whether the infrastructure exists to build a competitive product — it clearly does. The question is which businesses are using it most intelligently.  The Star