Banks cut out ‘middleman’ with PesaLink launch

Banks cut out ‘middleman’ with PesaLink launch

12 banks have been cleared by the central bank of Kenya to run and operate industry based mobile money transfer platform.

PesaLink, a brainchild of the Kenya Bankers Association (KBA), will enable bank customers move up to a million shillings through one transaction.

Through the platform, bank customers will be able to make payments between banks in real time, bypassing traditional intermediaries.

Traditionally banks have relied on Safaricom’s M-Pesa mobile money transfer service to connect customers to their accounts.

Speaking during the launch, KBA chief executive officer Habil Olaka said the move to have an industry owned mobile money platform was a clear indication of entrenching digital solutions to deepen financial inclusion.

“The investment by KBA in this product is focused on delivering an advanced solution that can handle bank customer transactions around the clock,” Mr Olaka said.

Other than mobile money transfers, through PesaLink bank customers will be able to transact via ATMs as well as Internet banking platforms.

Currently the platform offers person-to-person bank transfers.

In the second phase of the PesaLink roll out, KBA will be looking to enter into merchant payments as well as paying utility bills, a space largely dominated by M-Pesa.

Equity Bank recently began partnering with business to roll out merchant payment services through Equitel.

Standard Chartered Bank, 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 have all received product approvals from the Central Bank of Kenya.

NIC Bank Chief Executive Officer and KBA Vice Chairman James Gachora said banks would in future need to continue innovating to stay ahead of the curve.

“PesaLink is proof that the banking industry has embraced the technology revolution sweeping across the payments industry. It is through such innovations that Kenya earns its title as a global leader in fintech innovation,” Mr Gachora said.

Integrated Payment Services Limited (IPSL), a fully owned KBA subsidiary, will manage the platform.

Besides money transfer, KBA expects to be fully integrated into the national payments system.

This will enable banks play a part in micropayments that millions of Kenyan settle in cash every day, including paying for groceries, a haircut or bus fare.

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