Banks unveil own mobile money platform allowing transfer of nearly Sh1m

What you need to know:

  • So far, the system has only been enabled for person-to-person transfers.
  • Customers will be able to move money between accounts on the PesaLink system in real-time.
  • The banks offering PesaLink services are Standard Chartered, Co-operative Bank, Barclays Bank, Guardian Bank, Victoria Commercial Bank, Credit Bank, Prime Bank and Middle East Bank.
  • Transaction fees will vary depending on the bank that customers use to access the PesaLink service.

Twelve banks have said they are ready for their customers to sign up on PesaLink, a new mobile banking platform that allows users to transfer nearly Sh1 million in a single transaction.

PesaLink is a brainchild of Kenyan banks through which they hope to grab a bigger chunk of the electronic payments market currently tightly held by the telecoms-operated mobile money platforms.

Standard Chartered, Co-operative Bank, Barclays Bank,  Commercial Bank of Africa, I&M Bank, Diamond Trust Bank, Gulf African Bank, Guardian Bank, Victoria Commercial Bank, Credit Bank, Prime Bank and Middle East Bank customers have access to the service so far.
About 27 more banks, which are carrying out pilot tests in line with Central Bank of Kenya (CBK) requirements, are expected to come on board the new platform within a month.

Customers on PesaLink can make real-time transfers of a minimum Sh10 and a maximum Sh999,999. Fees will vary depending on the bank through which customers access PesaLink, although they have waived charges on all transactions up to Sh500.

“We were specifically trying to provide a service that is available to the consumer, even at the base of the pyramid,” said Kenya Bankers Association (KBA) chief executive Habil Olaka.

Banks jointly own and operate PesaLink through the Integrated Payment Services Limited (IPSL), a subsidiary firm of the lenders lobby, KBA.
After the Sh500 threshold, IPSL will charge each of the banks a fee of between Sh10-Sh12 per transaction. The decision on whether to or how to pass on these costs to consumers will lie with specific banks.

The platform was launched yesterday following the CBK approvals for the first batch of banks to begin providing services on PesaLink.  Each of the banks will customise and integrate PesaLink onto its own mobile banking platforms. This will be through the use of mobile phone applications or Unstructured Supplementary Service Data (USSD) codes.

PesaLink is different from the major mobile money platforms in Kenya in that it will not be housed within a SIM card application such as Safaricom’s M-Pesa or Equity Bank’s Equitel.

Mr Olaka said banks had opted to avoid the SIM card route due to the complex processes associated with getting mobile network operator licences.
PesaLink will also be integrated into ATM networks. To deposit or withdraw money onto accounts, customers will have to either visit bank branches or agency banking outlets.

Banks are at a disadvantage relative to the existing mobile money services which have built relatively robust agency networks across the country.
While this first phase of roll-out will focus on person-to-person transfers, there are intentions to integrate bill and goods payment services in the second phase of the project.

Bankers also plan to target increasingly digitised government services.

“Beyond the retail payments advantage, we also hope to build a solid e-government payment engine to support public sector payments,” said Mr Olaka.

From left, Kenya Bankers Association (KBA) vice chair and NIC Bank BD John Gachora, Integrated Payment Services Limited (IPSL) chief executive officer Jennifer Theuri and KBA chief executive Habil Olaka during the unveiling of the new product on February 16, 2017 at the Hilton Hotel in Nairobi. PHOTO | SALATON NJAU

Mobile money has become an integral part of commerce in Kenya over the last decade. In the nine months to September 2016, Sh2.46 trillion was transacted via mobile money. The business has thus far been dominated by telcos, in particular Safaricom through its M-Pesa service.

However, banks are becoming increasingly aggressive in their quest for a bigger share of the business.

Equity Bank’s Equitel service went live in 2015. Since then, Equitel has become the second largest mobile money service in Kenya in terms of transaction values.

Banks claim that PesaLink will have disruptive implications on the local market. Whether this will be the case remains to be seen.

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