SBM Bank Kenya has undercut its rivals by reaching a deal to drastically lower fees on Pesalink transfers to a flat rate of Sh20 for transactions of up to Sh1 million.
The lender has also made it free to send money for amounts of between Sh1 and Sh1,000.
The deal is expected to see the mid-sized lender attain the lowest fees for Pesalink transfers among banking peers, intensifying the competition for chargeable transactions in the industry.
Pesalink which is owned by the Integrated Payment Services Limited is an instant and inter-operable payment network facilitating the transfer of up to Sh1 million between bank accounts.
Other banks charge more for the same Pesalink transfers with those via Standard Chartered Bank Kenya for instance costing Sh250 for transfers between Sh500,001 to Sh999,999.
KCB Bank Kenya meanwhile charges Sh240 for Pesalink transfers between Sh200,001 and Sh999,999. Stanbic Bank Kenya charges up to Sh200 to transfer Sh999,999 via Pesa Link.
The largest mobile money services --Safaricom’s M-Pesa-- charges Sh108 for its maximum allowed transfer of Sh250,000 implying it would take at least Sh432 to transfer Sh1 million on the service.
SBM Bank Kenya hopes to leverage the low fees for the Pesalink service to enhance its payment solutions to clients.
“We are pleased to be announcing this partnership with Pesalink which will make money transfer in Kenya affordable for both retail customers and businesses, whilst still benefiting from the convenience, safety and security offered by the Pesalink platform,” said SBM Bank Kenya chief executive officer Aijaz Shalla.
“This partnership aligns with our revitalised strategy and vision to become Kenya’s preferred payments bank which is digital-first and customer-centric.”
Kenya’s banking industry has seen players compete on fees set on chargeable transactions with the view of attracting clients including retail/individuals and micro-small and medium enterprises.
In 2023, I&M Bank Kenya disclosed that it had doubled its growth in personal accounts after waiving bank-to-mobile-money transaction fees.
The lender said it added 68,666 accounts in 2023 compared to 33,359 accounts previously, bringing the number of personal accounts to 326,054 from 257,388 accounts previously.
The lender continued to zero-rate the transactions to individual customers even as most banks restored the fees on bank-to-mobile money at the end of a Central Bank of Kenya (CBK) induced waiver.
Pealink is Kenya’s leading interbank transfer solution for single transfers that are under Sh1 million.
According to the platform, Pesalink has facilitated transactions with an average ticket size of Sh135,236, translating to 8.2 million instant transactions.
“This pilot initiative is a model for what customer-centred innovation can look like in Kenya’s digital payments landscape," said Kenn Lisudza, the Chief Product Officer at IPSL.
"Our partnership with SBM bank represents a broader industry movement towards standardized and transparent pricing, with the goal of scaling similar models that deliver enhanced value and simplified payments across our wider network of banking partners.”
