00 — Overview & VerdictExecutive Summary: P2B Has Grown Wide Faster Than It Has Grown Deep

Eight headline findings

• 1. P2B is the fastest-growing payment layer. Value rose from TZS 18.25 trillion (2023) to 26.60 trillion (2024) and 37.52 trillion (2025). Its share of mobile payments rose from 11.8% to 14.7%.
• 2. Merchants are multiplying faster than the money per merchant. Merchant points grew 7.1 times between 2022 and 2025 (0.39 million to 2.79 million), while annual value per merchant fell from about TZS 30.7 million to 13.5 million (−56%; TICGL calculation). A registered merchant now receives about 2.3 P2B payments a day, against 3.6 in 2024.
• 3. The flow outruns the value added. P2B rose by TZS 10.9 trillion in 2025; implied ICT value added rose by only about TZS 0.14 trillion (companion report). A 1% effective fee on P2B is a TZS 375 billion pool, equal to 10% of ICT value added.
• 4. The data-to-credit link is weak and the credit that exists is small-ticket. Digital credit was TZS 5.58 trillion, only 14.9% of P2B value; the average digital loan was about TZS 16,600. Only 176,213 MSMEs hold formal credit accounts, under 6% of a base of three million or more.
• 5. Digital acceptance is running ahead of formal registration. The 2.79 million digital merchants are about 4.5 times the roughly 0.63 million MSMEs TICGL estimates are formally registered (12.5% of 5 million). The new mandatory electronic payments regime (GN 158C, in force 1 July 2026, transition to 31 December 2026) makes a digital facility a condition of business licensing.
• 6. Market structure and cost still shape who benefits. E-money issuers account for about 90% of merchants and banks for under 1%. IPA research finds three providers with near-identical fees, layered excise, VAT and levy, and merchant payments at only 3.9% of digital transactions.
• 7. The 2030 range is wide. P2B could reach TZS 71 trillion (downside), 99 trillion (rails-only), 122 trillion (value-addition push) or 147 trillion (mandate plus tools). The value-adding pathway is the one in which value per merchant recovers to about TZS 22 million and digital credit reaches 25% of P2B.
• 8. P2B is still largely unmeasured. There is no published split by merchant size, sector, region, formal status, active versus enabled merchants, or retail versus bill payments: the single largest obstacle to evidence-based policy.

Headline P2B indicators, 2023–2025

Table 1. n/a = not available on a comparable basis. 2023 volume is derived from the 2024 volume (1.74 billion) and the reported 28.52% growth. See Sources & Data Notes for series reconciliation.

01 — Question & FrameworkWhy a P2B Payment Is a Sale, Not Value Added, and How to Measure the Gap

The companion report showed that Tanzania's mobile payments (TZS 255.13 trillion, 109% of GDP) coexist with an ICT sector worth only 1.6% of GDP, and that the Digital Value Conversion Ratio fell from 1.81% to 1.47% in 2025. The natural next question is where, inside the payment system, that gap can be narrowed.

Why P2B is the best candidate: three reasons

A P2B payment is a sale, not value added

A P2B payment is the gross receipt of a business. It includes the cost of the goods the merchant bought elsewhere; the value added by the merchant is only the margin over those inputs. P2B of 16% of GDP is therefore a measure of how much commerce is being settled digitally, not a measure of output. Likewise, the value added by the payment service itself is the fee pool less the provider's intermediate costs, a small fraction of the flow.

The P2B value-addition chain

Four diagnostics used in this report

Table 2.1. These complement the Digital Value Conversion Ratio (DVCR = ICT value added ÷ mobile payment value) in the companion report. They are diagnostics, not performance grades: a falling depth ratio can reflect healthy inclusion of very small traders as well as weak activity.

Data and method

The report computes growth rates and shares from the published series, derives the four diagnostics above, tests five hypotheses, and builds 2030 pathways by varying P2B growth, merchant depth and credit conversion while holding total mobile-payment growth and GDP at the companion report's assumptions (18% and 10% a year respectively).

Three data limits matter: P2B is defined more broadly than the "merchant payment system" series (volumes differ by a factor of about four in 2023 although values are close); merchants are counted as "enabled", not "active"; and no breakdown by size, sector or region exists.

02 — Look-back 2022–2025Rapid, Accelerating Growth in Value, and a Merchant Base That Multiplied Sevenfold

Value: +71.4%, +45.8%, +41.0%

P2B value was TZS 18.25 trillion in 2023, 26.60 trillion in 2024 (+45.8%) and 37.52 trillion in 2025 (+41.0%). Volumes rose 30.4% in 2025 to 2.30 billion transactions. Value therefore grew faster than volume, and the average P2B payment rose from about TZS 13,500 (2023) to TZS 16,300 (2025), a sign that larger purchases, not only micro-payments, are moving onto digital rails. Total mobile payments grew by 28.3% in 2025, so P2B's share rose by 1.3 percentage points to 14.7%.

A merchant base that has multiplied sevenfold in three years

Merchants enabled to accept digital payments rose from 393,977 (2022) to 657,346 (2023), 1,327,803 (2024) and 2,789,455 (2025). The BoT attributes the surge to the spread of TANQR and "Pay Bill" (Lipa Namba) solutions. Electronic money issuers, mainly mobile network operators, account for about 90% of merchants and banks for less than 1% (BoT 2024 data).

Breadth has outrun depth

Dividing annual value by year-end merchants gives a depth ratio of about TZS 30.7 million per merchant in 2022, 27.3 million in 2023, 20.3 million in 2024 and 13.5 million in 2025, a fall of 56% (TICGL calculation using the merchant-payment series for 2022–2024 and the P2B series for 2025; an average-merchant basis shows the same direction, 27.1 million falling to 18.2 million between 2024 and 2025). Transactions per merchant fell from about 3.6 a day in 2024 to 2.3 in 2025.

Concentration on the leading platform

Vodacom Tanzania reports that its active M-Pesa merchant base grew 25.2% to more than 650,000 and that monthly merchant transaction value rose more than 40% to above TZS 2 trillion (latest quarterly report, 2026). Annualised, TZS 2 trillion a month is above TZS 24 trillion, roughly two-thirds of the 2025 national P2B total of TZS 37.52 trillion. The comparison is not like-for-like (different periods, and "active" versus BoT's "enabled" merchants), but it points to a pattern: a minority of merchants (about 23% of the enabled base) on the largest platform appear to carry a majority of the value, with a very long tail of low-value merchants on the rest.

Annual data, 2022–2025

Tables A1 and A2. Sources: BoT NPS Annual Reports 2022–2025 as reported by The Citizen, Daily News, TanzaniaInvest and The Nation; companion report (GDP, total mobile payments); TICGL calculation. 2022–2024 value per merchant uses the merchant payment system series; 2025 uses P2B value.

03 — Where the Value Goes, Issues 1–3Who Captures the Fee Pool, Why Thin Merchants Matter, and the Weak Data-to-Credit Link

This is the core of the report. For each of six issues it sets out the evidence, what it implies for domestic value added, and what would change it. Issues 1 to 3 are covered here; issues 4 to 6 are in the next tab.

Issue 1: Who captures the fee pool

The BoT does not publish the merchant fee take-rate, so the revenue pool created by P2B can only be sized by assumption. The table shows the pool at four effective fee rates, whoever pays (merchant, customer, or both).

Table 2. Source: TICGL calculation. Effective rates are illustrative assumptions. For reference, Safaricom's FY2026 merchant revenue of KES 13.3 billion against merchant payments of about KES 1.2 trillion in the first half of the year implies a take-rate of roughly 0.5–0.6% in Kenya (rough TICGL calculation; periods differ).

Two points follow. The pool is large enough to matter: even at 1%, P2B alone generates revenue equal to a tenth of the ICT sector's value added. But it is earned overwhelmingly by the mobile network operators that issue e-money and by a small number of banks, and Vodacom's own report notes that merchant payments are now a significant contributor to M-Pesa revenue growth (M-Pesa revenue +24.5% to TZS 734.8 billion). This is a legitimate return on heavy infrastructure investment. The value-addition issue is not the profit; it is whether the pool is reinvested in local platforms, tools and jobs, which cannot be tested without published revenue and cost data by use case.

Issue 2: Thin merchants and the depth problem

Value per merchant fell by more than half in three years. For value added, the relevant question is what a merchant does with the digital trail. A merchant with 2.3 payments a day (about TZS 37,000 of receipts a day at the 2025 average) can use a QR code but has little reason to buy inventory software, a bookkeeping app or a working-capital product. Tools and credit products have fixed costs; they only make commercial sense for local providers where merchant throughput is high enough. Raising depth, not just breadth, is therefore a precondition for a domestic tools market.

Issue 3: The data-to-credit link

Mobile-money histories are a high-quality signal of business activity, yet the credit system barely uses them for merchants. The evidence:

• Digital credit equals 14.9% of P2B value and 2.2% of all mobile payments.
• The average digital loan is about TZS 16,600. MSME growth loans are typically orders of magnitude larger.
• Only 176,213 MSMEs hold formal credit accounts (BoT 2025, as cited in The Citizen), under 6% of three million or more MSMEs (3.5% if the 5 million figure used in TICGL research is the base).
• TICGL research (via Uchumi360) estimates that only 5–7% of mobile-money data feeds credit scoring or tax systems.
• Between 60% and 70% of new businesses fail within three years, largely for lack of finance (TICGL, Doing Business in Tanzania 2025–2030).

04 — Where the Value Goes, Issues 4–6Formal vs Informal Merchants, the Tools Layer, and Cost, Market Structure and the 2026 Mandate

Issue 4: Formal versus informal merchants

No official split of P2B by formal status exists. TICGL research finds that only about 12.5% of MSMEs are formally registered, and that MSMEs number 5 million or more (most of the 98% micro-enterprises). On those figures about 0.63 million MSMEs are registered, so the 2.79 million digital merchants are about 4.5 times the registered base (some merchants are not MSMEs, so the multiple is indicative). Digital acceptance has outrun registration by a wide margin.

Issue 5: The software, platform and tools layer

P2B creates demand for reconciliation, inventory, invoicing, analytics and embedded finance. The evidence that this demand is being met locally is thin:

• ICT attracted USD 152.1 million of investment in 2025, against USD 442.2 million for mining and USD 401.3 million for finance and insurance (companion report).
• MSME e-commerce use was only 15% in 2023 against a FYDP IV target of 60% by 2031.
• The major recent platform investment visible in public reporting is operator-led: Vodacom's USD 28 million M-Pesa Fintech 2.0 platform, fully rolled out in 2026, extended investment products to merchants for the first time. This is positive for capacity but is not an independent local software layer.
• Smartphones are 41.8% of connections (December 2025), and IPA notes smartphones are only about 32% of connected devices in its sample, so USSD-based Lipa Namba remains essential for many merchants and limits app-based tools.

There is no public series on the number of local firms building merchant-facing software, on public procurement from them, or on ICT services exports. Without them the value-addition effect of P2B on the ICT sector cannot be measured and can only be inferred.

Issue 6: Cost, market structure and the 2026 mandate

Cost and structure. IPA's two-year research programme with the BoT found that three major providers have near-identical fees across most transaction bands, that consumers underestimate the true cost of cash-out and often rate cash as cheaper, and that excise duty, VAT and a transaction levy are layered on provider fees. It cites World Bank Global Findex data showing merchant payments at only 3.9% of digital transactions (by count, as reported by adults), while utility bills are 22.7%. This is consistent with BoT value data (P2B at 14.7% of value): merchant payments are small in number but larger in value. The BoT capped fees on instant payments and automated clearing at TZS 2,000 per transaction from 2024, and the Minister of Finance has told Parliament of further reforms to lower transaction costs.

Kenya's lesson. Safaricom's merchant base grew 71% to about 3.1 million. Kenya zero-rates small merchant payments (up to KES 200) and small P2P transfers (up to KES 100), a design choice that lets micro-merchants accept digital payments at no cost to customers while the operator earns on larger payments. Tanzania's merchant count is similar in scale, but the segmentation of formal tills and micro-merchant wallets, and the pricing of very small payments, are less developed. Segmenting the merchant base by size and tailoring fees and products to each segment matters as much as headline acceptance.

The 2026 mandate

The Electronic Transactions (Mandatory Electronic Payments for Specified Transactions) Order, 2026 (GN 158C) requires specified payments to be made and received electronically, including public transport, goods and services, education, accommodation, food and beverages, and high-value land, building and motor vehicle transactions. Amendments to the Business Licensing Regulations also require proof of a digital payment facility such as Lipa Namba or TANQR for new licences and renewals. The Government has said it will accelerate issuing Lipa Namba and QR codes to food vendors, bodaboda operators and market traders.

1. 30 June 2026: GN 158C published.
2. 1 July 2026: the Order takes effect; new licences and renewals need proof of a digital payment facility.
3. 31 December 2026: transition ends; persons already receiving specified payments must have electronic means in place.
4. 2027: the mandate will almost certainly raise merchant counts and P2B value. Whether it raises value added depends on what accompanies it.

The six issues at a glance

05 — Measurement & HypothesesIs It a Measurement Problem? Partly, and the Gaps Are Themselves a Finding

In 2023, P2B was about 1.35 billion transactions worth TZS 18.25 trillion while the merchant payment system recorded 301 million transactions worth TZS 17.9 trillion. Values are close but volumes differ more than four-fold, which suggests that P2B includes many small payments (bills, airtime and similar) that are not retail purchases. The depth and average-ticket calculations in this report are therefore indicative.

Testing five hypotheses

06 — Outlook 2026–2030Four Pathways: Same Payment Growth, Very Different Depth

The pathways hold total mobile-payment growth (18% a year, reaching TZS 583.7 trillion in 2030, or 12% and TZS 449.6 trillion in the downside) and nominal GDP (10% a year, TZS 377 trillion in 2030) at the companion report's assumptions, so that A–D here match scenarios A–D there. They differ in how fast P2B deepens and how much of that deepening is converted into credit, formalisation and local services. They are illustrative outcomes of stated assumptions, not forecasts.

P2B outcomes in 2030

Table 3. Source: TICGL scenario model. Values are illustrative outcomes of stated assumptions, not forecasts. Credit paths are those of the companion report's scenarios A–D.

07 — Economic ImpactGDP, MSMEs, Credit, Public Revenue and Jobs

GDP and value added

P2B is not GDP, but it gauges how much of the economy's commercial activity is digitally visible. In pathway B, P2B reaches about 32% of GDP in 2030. The direct ICT value-added effect is the one quantified in the companion report: the same payment growth gives ICT value added of TZS 6.4 trillion (A), 9.4 trillion (B), 11.3 trillion (C) and 5.7 trillion (D), so the B–A difference is about TZS 8 trillion of cumulative GDP over 2026–2030. The wider effect through merchant productivity, lower cash-handling costs and better inventory management would be additional and requires the satellite account proposed in the companion report to measure.

Table 7.1. Sources: TICGL scenario model; companion report (ICT value added). Illustrative outcomes of stated assumptions.

MSMEs and credit

MSMEs contribute about 35% of GDP and employ roughly half the workforce (TICGL), yet under 6% hold formal credit accounts. The FYDP IV targets of 40% formal credit access and 60% MSME e-commerce use by 2031 both depend on the P2B data-to-credit link and on digital bookkeeping. If digital credit were 25% of P2B in 2030 in pathway B, it would be about TZS 30 trillion, against TZS 20.7 trillion if current conversion continued, a difference of about TZS 10 trillion (TICGL calculation). Whether that capital reaches MSMEs rather than consumers depends on product design.

Public revenue and compliance

Electronic records lower the cost of presumptive tax, e-invoicing and merchant registration. Experts quoted in Tanzanian press expect the mandate to widen the tax base and curb evasion. The revenue upside is real but depends on administration being proportionate: a small merchant who sees the trail used only for enforcement has an incentive to avoid the rails, as the 2021–22 experience of the mobile-money levy illustrates.

Jobs

No official series exists for digital or ICT jobs, so jobs cannot be projected rigorously. The measurable proxy is the agent and merchant base (1.98 million agents, +34.4% in 2025, and 2.79 million merchants), which is mostly self-employment. The quality question is how many software, data, reconciliation and embedded-finance roles each additional trillion of P2B supports. The companion report proposes "digital jobs per million transactions"; for P2B we propose a narrower version, merchant-facing digital service jobs per million merchants, with a baseline set in 2027.

08 — Policy & KPIsFrom Merchant Counts to Merchant Outcomes: Eight Actions and a KPI Dashboard

The evidence points to a shift from merchant counts to merchant outcomes. Eight actions follow, consistent with the Digital Economy Strategic Framework 2024–2034, FYDP IV and the mandatory payments regime.

Table 4. Source: TICGL/TERI research report, Section 10.

Proposed P2B KPI dashboard

Table 5. Targets are TICGL proposals derived from the pathways and FYDP IV; they are not official government commitments.

09 — Risks & Data GapsWhat Could Go Wrong, What Is Not Measured, and What TICGL/TERI Will Do Next

Risks to the outlook

Data gaps

Next research steps for TICGL/TERI

• Merchant survey: about 1,000 merchants across Dar es Salaam, regional towns and rural markets on activity, fees paid, tool use, formal status and credit access, to replace inference with micro-data.
• Primary-source rebuild: obtain the full BoT 2025 report tables on P2B and merchants and rebuild the data tables from the primary source.
• Regional benchmark: merchant-payment depth in Kenya, Rwanda, Uganda and Ethiopia.
• Quarterly publication: the P2B depth ratio and credit conversion on the TICGL dashboard.