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September 1, 2025
Wingu News
Tanzania's finance sector is evolving at a remarkable pace, driven significantly by changes in transaction pricing over the past 24 months as mobile money (MoMo) players challenge traditional banking fees. What started as basic mobile money transfers has evolved into a comprehensive digital economy, where payments, credit, insurance, and commerce converge within mobile-first platforms. This transformation challenges the relevance of traditional banks while creating unprecedented opportunities for those who invest in agile, secure, and locally hosted data infrastructure.
From Mobile Money to Super Apps
The transformation began with mobile money services like M-Pesa, Tigo Pesa, and Airtel Money, which revolutionised financial access by enabling Tanzanians to send and receive money without traditional bank accounts. Today, these platforms are evolving into super apps, comprehensive digital ecosystems that bundle payments, lending, insurance, and e-commerce into a single platform.
Tanzania's Current Super App Leaders
Tanzania now has a clear leader in the super app space. Vodacom Tanzania's M-PESA Super App currently surpasses 6.7 million active users.1 The platform offers a comprehensive suite of integrated services including MKoba for mobile banking, Mgodi for savings, Songesha for bill payments, Tunzaa for managing loyalty points, and Visa GlobalPay Card for seamless international online payments.
Beyond M-PESA's established leadership, several other platforms are rapidly evolving:
- AzamPesa has expanded beyond basic mobile money to include bill payments, government payments, banking services, and airtime purchases
- Airtel Money continues adding merchant payments and integration with various service providers
- Selcom has positioned itself as a payment gateway and infrastructure provider, enabling other apps to offer comprehensive payment solutions
The market remains highly competitive across all five major mobile network operators (MNOs). According to TCRA Q2 2025 data, Vodacom maintains the largest market share at 32.1%, followed by Yas (formerly Tigo) at 28.1%, and Airtel at 22.4%, with Halotel and TTCL holding significant portions of the remaining market.2 Notably, no single operator controls more than 35% market share, indicating a healthy competitive environment.
The Numbers Tell the Story
The scale of adoption is remarkable. By Q2 2025, Tanzania processed 1.39 billion mobile money transactions in the quarter (up 1.9% from Q1's 1.37 billion), keeping the country on pace to surpass 2024's 6.41 billion transactions worth TZS 198,859 billion.3 Mobile money accounts rose to 68.1 million by June 2025, underscoring the platform's ubiquity in everyday payments.4
The value flowing through wallets is accelerating rapidly. In April 2025 alone, transactions via mobile money platforms reached TZS 18 trillion, up from TZS 14.5 trillion in April 2024.5 With Tanzania recognised in GSMA's 2025 reports as one of Sub-Saharan Africa's leading mobile money markets, the service continues to reset consumer expectations toward faster, more reliable, and deeply integrated digital finance.
The Foundation: Mobile Connectivity Revolution
This digital finance success depends on widespread mobile connectivity, and Tanzania continues to deliver. By Q2 2025, total mobile subscriptions reached 92.7 million6 against a population of over 70.8 million7, implying 131% SIM penetration, a mix of multi-SIM use and expanding network reach across urban and rural areas.
Internet adoption has accelerated even faster. After rising 33% in 2024 to 48.0 million8 subscriptions, they climbed further to 54.1 million by June 2025 (up 9.6% from March)9, reinforcing one of Sub-Saharan Africa's fastest digital adoption curves. Tanzania's government has actively supported this transformation through the National ICT Policy, the Universal Communications Service Access Fund (UCSAF), and investments in fibre optic infrastructure.
Why Traditional Banks Face New Realities
While all five major Tanzanian banks now operate mobile apps across all networks, sometimes zero-rated to minimise internet dependency, they face customers who expect mobile-first convenience matching the simplicity of mobile money platforms. Super apps benefit from powerful network effects that traditional banks struggle to replicate, keeping users within single ecosystems and turning transaction data into better credit models.
However, traditional banks have responded strategically. They've established strong partnerships with fintechs, insurance companies, and all major MNOs, leading to collaborative microcredit and loan products like Songesha and Nivushe that leverage the extensive reach of mobile money platforms.
Infrastructure Challenges and the Case for Local Solutions
As fintech adoption accelerates, so does the volume and sensitivity of financial data generated. Every mobile payment, loan repayment, and digital identity verification feeds into a growing pool of information requiring secure storage, processing, and analysis.
Reliance on international cloud services presents significant challenges: high costs for international connectivity, latency issues affecting real-time transactions, and dependency on unreliable cross-border data links create operational burdens that impact competitiveness.
For Tanzanian financial institutions, the location of customer data and transaction records is no longer just a technical detail, it is a competitive and regulatory imperative. The Bank of Tanzania (BoT), which regulates the financial sector under the Bank of Tanzania Act (2006) and the Banking and Financial Institutions Act, along with the Tanzania Communications Regulatory Authority (TCRA), are strengthening data protection laws with increasing requirements for in-country data storage to ensure compliance, sovereignty, and consumer trust. Additionally, the Bank of Tanzania (Fintech Regulatory Sandbox) Regulations (2024) provide a framework for fintech innovation while ensuring regulatory compliance.
The Partnership Model: Embracing Infrastructure Transformation
For incumbent banks, adapting to a super app world involves embedding themselves into the digital finance value chain within the regulatory framework established by BoT. The Tanzania Instant Payment System (TIPS), launched in March 2024, represents a national retail payment infrastructure changing how money flows between Digital Financial Service Providers (DFSPs).
The Rise of Outsourced Solutions
Banks and fintechs increasingly turn to outsourced colocation and local cloud platforms as a strategic response to digital transformation demands. Rather than building expensive in-house data centres, they partner with specialised infrastructure providers to access enterprise-grade facilities without capital expenditure burdens.
Local colocation providers offer financial institutions flexibility to maintain direct control over critical systems while benefiting from shared infrastructure costs. This model proves particularly attractive to fintechs, allowing rapid scaling without massive upfront investments, while established banks leverage hybrid models where core systems operate in secure local facilities and non-critical workloads utilise public cloud resources.
Cost Optimisation Through Local Infrastructure
This shift drives significant cost reductions by dramatically decreasing reliance on expensive international connectivity. Local hosting eliminates substantial cross-border data transmission costs, reduces latency-related expenses, and improves customer satisfaction through faster transaction processing.
The cost benefits extend to regulatory compliance. By keeping data local from the outset, institutions avoid expensive architectural changes required to meet evolving data sovereignty requirements while reducing legal and audit costs associated with cross-border transfers.
Local data centre providers offer geographically redundant sites within Tanzania, safeguarding operations against technical and operational disruptions while enabling cost-effective, compliant infrastructure partnerships.
Conclusion
Tanzania's fintech revolution is real and accelerating. Super apps have set an aggressive pace, but traditional banks have responded with strategic partnerships across the ecosystem. The foundation of continued transformation extends beyond software to infrastructure capable of handling rapid digital growth while meeting sophisticated customer expectations.
Secure, high-performance, locally hosted infrastructure will differentiate between regulatory compliance headaches and sustainable competitive advantage. For banks and fintechs operating within Tanzania's regulated environment, working with BoT, TIPS, Payment Service Providers, and other critical infrastructure, the message is clear: invest in partnerships and platforms that enable data control, regulatory compliance, and exceptional customer experiences.
Local data centres are not just back-end facilities; they are the digital strongholds on which Tanzania's financial future will be built. Those who recognise this reality and act accordingly will shape the institutions that define Tanzania's financial future and potentially serve as models for digital finance transformation across Sub-Saharan Africa.
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