Digital wallets in Kenya have become indispensable for daily transactions, handling trillions of shillings and serving tens of millions of users. But their rapid rise has also created new vulnerabilities, with cybercriminals and fraudsters exploiting gaps in regulation and user awareness.
Growth Outpacing Security
By early 2025, Kenya had 45.36 million mobile money accounts, a 7.2% increase from the previous year. The overall number of mobile money subscriptions reached 85 million by May 2025. The number of smartphones connected to mobile networks stood at 42.3 million, representing 80.8% penetration, according to the Kenya National Bureau of Statistics (KNBS).
Mobile phone penetration was at 143%, with smartphones making up 80.8% and feature phones 62.2%. Internet usage also expanded, with 27.4 million Kenyans online at the start of 2025, pushing internet penetration to 48%.
The number of mobile money agents grew by 5.5% to 416,994. In 2024, mobile money agent transactions were valued at KES 8.7 trillion ($67.3 billion), accounting for 53% of Kenya’s GDP. By early 2025, transaction volumes surged by 38.1% to 873.9 million, even as the total value of cash processed by agents dropped by 12.1% to Sh2.04 trillion.
Safaricom’s M-Pesa dominates the market, with more than 92% share. It processes over 61 million transactions daily and serves more than 50 million active users. Competitors include Airtel Money, Equitel, PesaLink, and Pesapal, alongside international e-wallets like Skrill, Neteller, and Jeton.
Escalating Cyber Threats
The rapid growth has made digital wallets a prime target for criminals. The Kenya National Computer Incident Response Team reported that detected cyber threat events rose from 2.5 billion in Q1 2025 to 4.5 billion in Q2, an increase of more than 80%.
Breakdown of attacks in Q1 2025:
A 2025 Visa study found that 71% of Kenyan consumers have fallen victim to scams, the highest rate in Sub-Saharan Africa. Scams often rely on social engineering, fraudsters posing as brand promoters, government officials, or mobile wallet agents to trick users into sharing credentials.
In one of the most notable breaches this year, cybercriminals stole $4 million by breaching a bank’s systems, creating new digital wallets, and laundering funds through USDT stablecoins on decentralized exchanges.
Financial Impact of Cybercrime
Kenya lost an estimated $83 million (KES 10.7 billion) to cybercrime in 2023. Businesses in the financial sector spent an average of $4.35 million each to recover from attacks, according to cybersecurity reports. With AI-powered phishing and deepfake scams now in play, the economic impact is expected to rise further.
Regulation and Gaps
The Central Bank of Kenya (CBK) regulates payment service providers under the National Payments Systems Act (2011), requiring them to comply with Know Your Customer (KYC) standards, record-keeping, and consumer protection rules. The Data Protection Act of 2019 adds another layer, mandating registration of data controllers and imposing fines for breaches.
However, cryptocurrency-linked wallets remain loosely regulated. The Virtual Asset Service Providers (VASP) Bill, introduced in 2025, seeks to bring crypto wallets, exchanges, and stablecoin issuers under CBK oversight. Kenya’s inclusion on the FATF grey list due to weak digital asset regulation has increased international pressure for faster implementation.
Consumer Vulnerability
Even with safeguards like two-factor authentication, SMS transaction alerts, and data encryption, consumer behavior remains a weak link. The Visa Stay Secure Study (2025) found that:
- 97% of consumers in Kenya and CEMEA take at least one precaution, such as ignoring suspicious emails or monitoring statements.
- 71% avoid email-based money transfer requests.
- 67% refrain from sharing card details.
Despite this, scams continue to succeed. Younger users, especially Gen Z and Gen X, are among the most vulnerable. Public campaigns such as Kaa Chonjo! have helped raise awareness, but fraudsters continue to innovate with AI-driven malware and social engineering.
The prepaid card and digital wallet market in Kenya is projected to reach $2.97 billion in 2025, up from $2.48 billion in 2024. It is expected to grow at a 21.56% CAGR between 2025 and 2030, reaching $24.85 billion. Yahoo! Finance projects a 16.2% CAGR for 2025–2029.
The future of digital wallets in Kenya will depend on stronger regulation, improved governance, and more investment in consumer education. Providers are expanding governance, risk, and compliance (GRC) strategies to counter fraud, while the CBK is moving toward stricter supervision.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.