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Banks set varying fees for PesaLink transfers

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The Central Bank of Kenya. FILE PHOTO | NMG

Banks are charging different fees on their newly launched PesaLink money transfer service in a mixed strategy of attracting customers and growing transaction-based income.

Tariffs reviewed by Business Daily show that some banks have low rates of Sh40 and below for sending amounts of up to Sh999,999, signalling that they see the service as more of a value-add than an income stream. Others are charging highs of up to Sh200, indicating a bid to prevent loss of revenue from PesaLink which is expected to eat into the usage of other payment options including cheques.

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“It’s a free market. Each bank is free to determine what the appropriate charges are,” said Habil Olaka, the chief executive of Kenya Bankers Association (KBA). “The banks are also in competition, so you can’t set unreasonably high rates. The Central Bank of Kenya must approve the products and one of the issues considered is the fees.”

NIC Bank #ticker:NIC does not charge anything for transactions below Sh500, while those between Sh501 and Sh10,000 will cost Sh50 increasing to Sh200 for transactions above Sh500,001.

I&M Bank on the other hand charges Sh0 for transactions less than Sh500 while those above that will be charged a flat fee of Sh40. Cooperative Bank #ticker:COOP is charging Sh42 for transactions between Sh501 to 10,000 with a top charge of Sh152 for transactions between Sh501,000 and Sh999,999.

Pesalink is owned by the banks through KBA and each lender’s cost of offering the service includes charges by other parties offering their infrastructure including telecommunications firms.